Apple Inc. (NASDAQ: AAPL) has so far refused to succumb to the economic slowdown in the same manner as other technology companies. Even the threat of a long-term brain drain is not changing the outlook to any extra caution in a post-Steve Jobs era at Apple.
Stern Agee’s Shaw Wu has maintained his strong outlook for Apple in a fresh research report. The report puts channel checks showing strong trends with just three weeks remaining in the quarter. Some of the highlights were that the iPhone is surprisingly robust even ahead of the coming refresh cycle. The iPad was also called stronger as another supplier has been added to the mix.
Wu noted, “As a result, we are raising our forecasts. We are now assuming 18.5 million iPhones (from 15.7 million) and 12 million iPads (from 10.4 million). We are leaving our Mac forecast at 4.1 million units. We are also assuming a higher gross margin of 41% (from 39%) due to a favorable product mix toward iPhone and improved iPad profitability.”
Stern Agee is now at $29 billion in quarterly revenue and $7.47 in EPS versus a prior estimate of $26.2 billion and $6.22 in EPS. Consensus is listed as $28.7 billion in revenue and $7.00 in EPS. Estimates have been raised for 2012 as well. Stern Agee is reiterating its Buy target and the firm has a $500 price target.
Stern Agee was not alone this week. Canaccord Genuity analyst Michael Walkley said that channel checks indicated strong sales ahead of the iPhone 5. Walkley reiterated his Buy rating but he raised his price target to $545 from $515.
The upside based on a Stern Agee target based upon a $585 Apple price today is roughly 30%. If Canaccord Genuity’s price target is hit, that is a call for upside of about 41%. The consensus target is roughly $493.00.
JON C. OGG