Seeking Alpha

Apple continues summer rally; Needham lowers PT

  • Apple (AAPL +2.4%) is adding to its summer gains following an ITC win against Samsung, and an AllThingsD report stating the next iPhone will be revealed on Sep. 10.
  • Needham (Buy) has lowered its PT to $595 from $710 (still 27% above current levels), citing "a more hostile competitive environment." The firm's FY13 and FY14 EPS estimates of $39 and $42 are slightly below consensus.
  • The WSJ reports something already widely expected: the 5th-gen iPad will use a film-based touch panel similar to the iPad Mini's, which in turn will yield thinner/lighter hardware.
  • Fairly reliable KGI Securities reports the iPhone 5S' home button will be made of sapphire (an incremental positive for GTAT), and (to make room for its fingerprint sensor) will be convex instead of concave. The iPhone 5 features a sapphire camera lens cover.
  • Meanwhile, Digitimes is again reporting (previous) fingerprint sensor production issues will limit calendar Q3 5S production. 3M-4M Q3 units are said to be expected vs. an initial 10M.
  • Japanese blog Mac Otakara has joined the list of sites reporting the low-cost iPhone will be called the 5C, and that a gold color version of the 5S will be available.
Comments (5)
  • grange402
    , contributor
    Comments (121) | Send Message
     
    Yeah, Apple will remember Needham lowering its estimates, as it zooms over 600.
    12 Aug 2013, 02:59 PM Reply Like
  • 6151621
    , contributor
    Comments (1169) | Send Message
     
    What good is a price target without buying in large quantities to back it up? These PT are stories like daily soap operas + racetrack betting combined...
    12 Aug 2013, 04:06 PM Reply Like
  • Hayweed
    , contributor
    Comments (354) | Send Message
     
    Just means he will have to raise it when Apple gets to $600.
    12 Aug 2013, 05:30 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (1335) | Send Message
     
    Apple, IMHO, is at least $100 too low on current fundamentals--that is not counting any of their cash and assuming they don't come out with anything new. They don't really deserve a discount to the S&P, but even discounting them 30% to the PE of the rest of the S&P, not counting any of their ~150Bn in cash, disregarding the dividend, and assuming they won't do anything particularly innovative, they would still be in the high 500S. Also, I was one who grossly underestimated the impact of the 4S. Not sure why the S models are so popular; it doesn't make sense, but it may happen again. I think the amount of upgrades will be high because there are so many 4S customers who will be up on their two years--the upgrade cadence seems to bode well for the S years. The 5C is a wild card, folks. If it enables some new carriers, it is likely to generate a lot of new business. Apple probably should take off higher than last year. It can move very fast! Finally, don't forget the buyback will make a dropping EPS tough. If they have 820-850mm shares in a couple of years, even flat profits will yield significantly higher EPS for Apple. Apple is a buy based on the extreme pessimism that is priced in imho.
    12 Aug 2013, 07:11 PM Reply Like
  • gmmpa
    , contributor
    Comments (466) | Send Message
     
    I am amazed at how badly the market is evaluating Apple. Even if it isn't worth $700+ / share it is a no brainier at $460. This company is generating huge amounts of cash. Cash that can be used for a lots of things that can add value to the company with a management that knows what to do with it.

     

    I am currently long Apple and am so sure of this I may buy some out of the money calls to maximize returns when the market discovers the baby in the bath water.
    12 Aug 2013, 11:07 PM Reply Like
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