Need an iMac refresh by March

Long term recommendation:
STRONG BUY below $174
buy from $174 to $194
neutral from $194 to $216
sell above $216

For the year, Mac and iPhone unit estimates are reduced considerably, iPod units estimates remain unchanged, and gross margins are revised higher.

For this quarter, estimate of 2.4 million Mac units assumes desktops getting refreshed by early March.


3mo ending Mar-2009:

FY09Q2    Revenue($B)  EPS($)
        -----------  ------
Apple guidance   7.80    0.95
Analysts cons.   7.97    1.08
My estimate      8.54    1.33
My non-GAAP e.   8.99    1.52

Product  Units(M)
-------  --------
Mac           2.4
iPhone        3.1
iPod          9.5

12mo ending Sep-2009:

FY09      Revenue($B)  EPS($)
        -----------  ------
Analysts cons.  35.35    5.19
My estimate     37.62    6.08
My non-gaap e.  42.12    8.04

Valuation (25 x fwd EPS):

Timeframe   Period  Price  fwd-12mo EPS
          ------  -----  ------------
Fair Value  Mar-09    174          6.94
1yr Target  Dec-09    216          8.65
Analysts mean target  124

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