Wednesday, February 18, 2009

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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