Hoopes lays out a half dozen reasons for his more aggressive stance on the stock:
- Apple’s Back-To-School season was healthy.
- Leopard and iLife software refreshes and the launch of the iTV in early [calendar 2007] and success in the enterperise later in ‘07 will boost revenues, increase earnings power, and expand valuation multiples.
- Apple (like other PC vendors) will also benefit from pent-up demand in European markets.
- Apple retail stores appear primed to deliver back-to-back solid quarters in the September and December quarters.
- There is potential for up to $400 million (or over 40 cents a share) in contribution profits from Leopard in the 12 months after its release.
His conclusion: “Never in the history of the PC has a company been better positioned than Apple is at this time to both gain share and improve profitability…Apple’s software holds the key to additional share gains and margin expansion."
In pre-market trading, Apple shares were up 83 cents, at $73.83.Comment on this article