Seeking Alpha

PT hikes, upgrade follow Apple's FQ2 beat; is Dow inclusion next?

  • Apple (AAPL +8%) has received 5 PT hikes to go with one upgrade (from CLSA) following its iPhone-driven FQ2 beat, dividend/buyback increases, and split announcement.
  • Jefferies (Buy) isn't crazy about FQ3 guidance (it thinks FQ2 demand pull-in is a factor), but is pleased with the pickup in iPhone sales growth and recommends buying shares "ahead of what we believe will be a successful iPhone 6 launch."
  • Canaccord (Buy): "While our survey work indicates iPhone will likely lose share over the next several months to refreshed Android products, we believe Apple will win back meaningful high-end market share during [2H14]."
  • Nomura (Neutral) is more cautious, noting growth was just 0.4% Y/Y outside of China and Japan. But it also sees "little risk of a material negative disappointment in the coming months."
  • Also: 1) Ahead of Angela Ahrendts' arrival next week, Tim Cook suggests Apple plans to triple its Chinese store count over the next two years. 2) Many observers have pointed out Apple's split could lead it to join the Dow (DIA), given the index is price-weighted rather than valuation-weighted.
  • More on Apple's FQ2. CC transcript.
This was corrected on 04/24/2014 at 11:31 AM.
From other sites
Comments (24)
  • crash9010
    , contributor
    Comments (158) | Send Message
     
    Guidance!? Guidance!? Apple doesn't need any stinking guidance.
    24 Apr 2014, 10:43 AM Reply Like
  • pat45
    , contributor
    Comments (393) | Send Message
     
    Sold AAPL premarket, reloaded and will sell again by Friday, sorry don't see much new here other than split. Earns up mainly because of buybacks..fewer shares outstanding. In 2012 they made over $12 this quarter with more shares out... meaning they earned a lot more.
    24 Apr 2014, 11:46 AM Reply Like
  • Warren Buffet007
    , contributor
    Comments (1016) | Send Message
     
    Relax.
    25 Apr 2014, 03:29 AM Reply Like
  • PGWFTW
    , contributor
    Comments (90) | Send Message
     
    pat,

     

    Only half of the per share increase was due to buybacks. Of course 100% of the dollar increase was a bona fide increase in profits.

     

    That's not bad, given that the profit in dollars was expected to decline, not rise.

     

    P...W
    25 Apr 2014, 11:37 AM Reply Like
  • scott trader
    , contributor
    Comments (5715) | Send Message
     
    Now the big houses raise their rating to buy......that was easy..talk about skating to where the puck is sitting..
    24 Apr 2014, 10:55 AM Reply Like
  • szeducate
    , contributor
    Comments (108) | Send Message
     
    Apple followers should now understand that these analysts are not much smarter than the people who are strong Apple followers. All we heard from analysts that their uncle's cousin, who lives next door to someone, who is friends someone else who works at a factory that supplies Apple iphones and says they are cutting production sharply. One this rumor Apple drops 20 points and all the analysts point to it as reaffirmation that Apple is slipping. Now we see a renewed Tim Cook who finally is waking up to shareholders unhappiness with his leadership. All of this and we have not heard from Apple regarding its new product launches. I for one am very optimistic about the second half of the year.
    24 Apr 2014, 11:05 AM Reply Like
  • apple_investor
    , contributor
    Comments (228) | Send Message
     
    I believe the tripling of store count was for China only. If you check the context of the remark, you'll see that is the case. Growth, no matter where it is coming from, is still growth. It's amazing how the finance community has to find something to complain about with Apple. It really is the Rodney Dangerfield of stocks.
    24 Apr 2014, 11:14 AM Reply Like
  • scott trader
    , contributor
    Comments (5715) | Send Message
     
    I am pretty positive some news will come out related to the firing of seventy nike fuel band employees and apple introducing a new health monitor wristband....Angela Ahrendts arrival will coincide with the introduction and marketing.
    24 Apr 2014, 11:32 AM Reply Like
  • WisPokerGuy
    , contributor
    Comments (1053) | Send Message
     
    Here's the real question everyone who follows Apple (bears & bulls) should be asking themselves - WHERE WERE ALL THESE EXPERTS 3 MONTHS AGO?

     

    At least to me, the answer is pretty obvious. These so called "experts" don't know much more then you or I. They may have access to channel flows or supplier information, but in the end it all comes down to how your interpret the information that the company is giving you. It's pretty obvious that they got almost everything wrong this quarter. NICE JOB GUYS!!!

     

    I've been long Apple for almost 5 years. It's my largest position. Although I'm not a big fan of Tim Cook, Apple gave people pretty much everything that shareholders wanted in this quarter with the exception of announcing a new product line (which no one was expecting now anyway). That is a BIG exception. However, as I sit here looking into the future 12-18 months, it seems pretty apparent that Apple has heard the shareholder complaints and has reacted in a positive manner. To that I say "bravo". And since that is the case, I'll hold my position and wait for their next move.

     

    One last thought... It would be curious to know just how many of the moves Apple made last night would have occurred if Carl Icahn hadn't gotten involved in this stock last fall? Just saying.
    24 Apr 2014, 12:01 PM Reply Like
  • Value George
    , contributor
    Comments (222) | Send Message
     
    WP Guy: I agree with you - without the wailing and nashing of teeth from Carl Icahn, I bet we would be seeing a much less shareholder-friendly Apple.

     

    I know you are not a Tim Cook fan. But I would ask a similar question. Would Steve Jobs have had the patience, humility and logistical chops to get the China Mobile deal done as soon as Tim Cook did? Sometimes a new leader brings skills needed for the next stage of company development. Just asking. :)
    24 Apr 2014, 12:18 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (1053) | Send Message
     
    My issues with Tim cook is that he impresses me as a "manager" not as a "leader". Being a "manager" is not necessarily the worst thing because like you say, the China Mobile deal is a good example. However, up until now Tim Cook has talked a LOT about the great new products in the pipeline and basically delivered little. This has gone on for about 18 months which is MUCH too long. It seems like Cook wants to have things both ways. Drive excitement with new product anticipation but keep the secrecy Apple is known for. To me, that has hurt the stock a LOT more then helped it because it constantly disappoints everyone when they don't announce something new.

     

    It's time for Cook to fish or cut bait. In other words, deliver or keep your mouth shut. That's my main complaint.
    24 Apr 2014, 12:35 PM Reply Like
  • Value George
    , contributor
    Comments (222) | Send Message
     
    Czn't argue with you on the lack of exciting product announcements. Let's see what Tim Cook announces in the rest of 2014.
    24 Apr 2014, 02:40 PM Reply Like
  • mobyss
    , contributor
    Comments (2213) | Send Message
     
    "This has gone on for about 18 months which is MUCH too long"

     

    Coincidentally, the stock peaked at $700 18 months ago.

     

    Playing around with dividends, buybacks and splits is good for shareholders, but without product it won't matter long.
    24 Apr 2014, 03:00 PM Reply Like
  • duhaus
    , contributor
    Comments (320) | Send Message
     
    WisPokerGuy
    Being frustrated with the timeline is somewhat understandable as we're all wanting as much as possible as soon as possible but that is not reality or reasonable investing expectations. We must all temper that innate desire with intelligence and understanding and accept that. Apple in particular does not move haphazardly nor will they be pushed into straying from their thesis that has worked remarkably over the long run. If one cannot accept and/or understand this then investing in stocks is a bad choice. Investors understand this, traders are another story.
    24 Apr 2014, 03:01 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (1053) | Send Message
     
    Duhaus

     

    I've been invested in this company for almost 6 years. So, I don't consider myself a "trader" in Apple. If you read my original comment thoroughly, you'll see that my main complaint with Tim Cook is that he has been BIG on promises of new products and hasn't really delivered any new products. I worked in the technology field for almost 35 years and I completely realize that brilliance doesn't operate on a schedule. However, Mr. Cook's big talk has caused repeated harm to the share price although it probably makes Mr. Cook feel good about himself.

     

    As I said, it's time for the Apple Corporation being run by Mr. Tim Cook to deliver something new. Thus far, this particular version of Apple has produced nice upgrades to old Steve Jobs' idea. That's not going to cut it for much longer.

     

    I don't intend to sell my shares. Nor do I intend to invest further until this question has been answered one way or another.
    24 Apr 2014, 03:17 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11779) | Send Message
     
    Yes, that's the big if he mentioned. Apple's new phone refresh touting a bigger screen will be big for Apple lovers who are clueless that this is following not leading (and being last to the game behind even every no name brand phone maker). Apple... where's your mojo and why is every famous creative person in your company fleeing?
    25 Apr 2014, 12:32 AM Reply Like
  • todaystheday
    , contributor
    Comments (56) | Send Message
     
    Guy, like your self, I first bought 400 shares of AAPL in 2009. I've added much more since then. $455 last year was the last purchase. Did not cash in at 700 or even 600 on the way down, but did stop out for a small profit build with the $455 purchase. I do not agree with your Tim Cook main complaint. He has been big on promise, but he's not indicated the product promise was coming before now. 2014 was his time line and so I feel we should give him that. If January 2015 comes around with nothing dynamic, then, I'm with you. Don't see where his big talk has hurt the stock either. I guess with many analyst who need to see something new all the time, you could say his talk has not helped. Remember, Cook has said over and over again, that quality and a best product is Apple's goal-they don't think in terms of who's first. If for example an I-watch is coming, it's great that it follows the mess made first by Samsung and others. If you've followed AAPL long enough, you know that when a product surfaces, it will be quality and wanted.
    25 Apr 2014, 06:34 PM Reply Like
  • 7of9
    , contributor
    Comments (369) | Send Message
     
    iPhone 6 will dominate the high end going forward. Samsung's only differentiator, larger screen size, is gone. With big screen iPhones out, only way to sell Android phones is lower cost. iPhone 6 will kill Samsung/LG's margins.

     

    AAPL to $1 trillion market cap!
    24 Apr 2014, 05:01 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11779) | Send Message
     
    LOL with the big screen/form factor, however, realize its Apple copying Samsung not the other way around. Last, Apple's price for their new phone is absurdly priced for the wealthy geek. It won't affect margins on Samsung a whit.
    25 Apr 2014, 12:33 AM Reply Like
  • Value George
    , contributor
    Comments (222) | Send Message
     
    To quote Warren Buffett007 higher up the comment stack:

     

    Relax

     

    You could be right or wrong, Moon. Time will tell. Breathe easy.

     

    Relax
    25 Apr 2014, 05:01 AM Reply Like
  • scott trader
    , contributor
    Comments (5715) | Send Message
     
    What rock did David trainer crawl under usually cnbc brings him out right around earnings...he said apple was fairly valued at mid 200's as of last call....
    24 Apr 2014, 08:15 PM Reply Like
  • paparam
    , contributor
    Comments (27) | Send Message
     
    Cannot believe how picky people are. Personally I don't care how and why share prices rise so long as they do. I picked up a cool 120K today- my only concern is how much the tax bite will be, not why Apple made the move, whether it was financial trickery or whether it is a substantial increase in earnings.Why get wrinkles arguing about piddly stuff?
    24 Apr 2014, 08:28 PM Reply Like
  • altaire4
    , contributor
    Comments (119) | Send Message
     
    60 % of all new iPhone sales sold this quarter came from Former Samsung Android users .... Apple dominates the Premium High End while Samsung is deeply discounting its latest Galaxy smartphone. AAPL will make even bigger inroads this Fall ! Long AAPL !!!
    25 Apr 2014, 04:23 AM Reply Like
  • Skippy09
    , contributor
    Comments (1694) | Send Message
     
    What's amazing is that this stock increased almost 10% this week and people are still bashing it! Tim Cook is the man and Steve Jobs knew it.
    25 Apr 2014, 09:46 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs