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Apple (AAPL) is reiterated a Buy with $900 price target by Jefferies' Peter Misek, who sees the...

Apple (AAPL) is reiterated a Buy with $900 price target by Jefferies' Peter Misek, who sees the firm's gross margin issues being positively resolved in Q4. Misek has Q4 iPhone sales of 53M - about 5-7M above the Street - which could boost margins by 80 bp. Add that to Apple's typical 300 basis point lowball (36%), and Misek sees CQ4 GM at 40%. He raises his EPS estimate to $16 from $15.50 (Street consensus: $13.52). Shares +0.8% premarket.
Comments (39)
  • What about Foxconn's admission about tight supply for iPhone 5 and their ability to get this issue resolved in time for Q4 sales?
    8 Nov 2012, 09:02 AM Reply Like
  • We know they are making 500,000 iphones a day. So that should be around 45,000,000 for the quarter as they are back ordered 3-4 weeks globally. The only question is: can AAPL ramp up production before the end of the quarter. The FOXCONN CEO said that they were going to produce the iphone through their other division which means a ramp up. Who knows what else Cook has Cookin'. My guess is that they were caught a little flat footed at the launch, but know now that the demand is staggering. With China Mobile coming online in 2013 with 700,000,000 subscribers, AAPL knows they have to get daily production up significantly. With 1.3 billion people in China and 3 billion in Asia, it shouldn't be too hard to pull some more people out of the rice paddies and teach them how to snap some parts together. Also, AAPL is moving towards more robotic assembly which will widen margins and eliminate PR issues with FOXCONN work conditions. I think they will get production ramped up to 600,000-700,000 units daily by the end of the quarter. This should get them well over 50mm units for the quarter. ipad and mac sales will crush the quarter as well. Expect the same for the March quarter.
    8 Nov 2012, 09:33 AM Reply Like
  • This is just to scare inexperienced investors, there certainly would be economies of scale issues, but most experienced investors knew that would occur as projected demand for the iphone 5 was huge, the supply chain would have to be finely tuned as production ramped up which is exactly what is occurring this often occurs for large production of a new product, the wrinkles will be worked out. Foxconn had said the same thing after the iphone 5's weekend launch, yet between the launch and Sept 30 end of Q3, 6 million phones were delivered plus a few million more preordered. Foxconn and other suppliers manufactured alot of phones then, despite the spin in the popular media to scare inexperienced investors that there was a drastic shortage, to benefit swing traders. Apple's fundamentals are solid, with a PEG of .52 very low for a tech company meaning it has a high projected growth, a PE of btwn 11-12 depending on the stock price which is very volatile at the moment but no need for this. Largely profit taking, people selling for taxes, swing traders/options traders creating volatility for short term profit, inexperienced long-term investors selling when there is absolutely no reason too Apple will steadily reach a mid 700 mark plus, which would better reflect it's current fundamentals, and should slowly move upward as new sales figures come out, or new products perhaps introduced by Apple in March, or October 2013. With higher sales expected in fiscal 2013, higher dividends should occur too, Apple is a great long-term hold. Tim Cook is also appearing to be very competent in many regards such as talent retention i.e. Bob Mansfield. Retention of skilled, experienced staff of which there is a shortage is key for tech. companies like Apple's ongoing growth. Apple also has increasingly responsible environmental standards including most aspects of all products cycles can be recycled or are made from recycled materials. This is key considering the company will be selling 100's of millions of new devices over the next 5 years. My goal is to leave the planet in better condition than when I first arrived hence I donate funds to various environmental stewardship groups!
    8 Nov 2012, 09:51 AM Reply Like
  • PositiveProsperity = Would you consider Jim Cramer & his crew to be in your inexperienced investor class?
    8 Nov 2012, 11:24 AM Reply Like
  • Rice paddies? The Chinese have higher literacy rate (they scored higher on math and language than the US) and more qualified workers so just because they are poor, doesn't mean they are not proud.


    Another more politically correct way to to increase production: get Obama administration to enact laws to lower tax on repatriation, with the caveat that the repatriated money be used to generate US jobs. Apple can then open assembly factories equipped with robots, import raw material or partially assembled parts, and stamp "made in the USA" label on their products. The job created will be higher pay job due to the automation/robotic knowledge required.
    8 Nov 2012, 12:43 PM Reply Like
  • How do we know they're making 500,000 a day?
    8 Nov 2012, 04:44 PM Reply Like
  • No serious investor pays any attention to Jim Cramer.
    8 Nov 2012, 04:45 PM Reply Like
  • yes.
    8 Nov 2012, 04:45 PM Reply Like
  • Yes, he claims he favored Apple since it was $50 per share but did not buy it then and didn't get on board until much later. Now he is selling it based on a conversation with Jobs biographer. The information cited is over a year old. Trading on year old information is definitely a sign of inexperience.
    9 Nov 2012, 06:37 PM Reply Like
  • Someone with a calculator and a clear head on Wall Street. Thank God
    8 Nov 2012, 09:16 AM Reply Like
  • A sound long-term target price based on facts and fundamentals not unsubstantiated spin in the day to day news largely meant to create volatility in the stock for for the benefit of short term calls and day trading.
    8 Nov 2012, 09:54 AM Reply Like
  • There is a lot of hate for Apple. It has gone WAY too far.
    8 Nov 2012, 09:36 AM Reply Like
  • @Dean, concur completely.


    @dehilster - the hatred has completely clouded their judgment so that they are thinking irrationally, and they try to make cases that are based on fantasy. In my observations, they go a little further, they are rude to others about it. Additionally, if they hate the stock so much, why do they continue to hold onto it? This really fascinates me. Psychologically, there are those that loathe the success of others. That plays here, too.
    8 Nov 2012, 09:58 AM Reply Like
  • It can and does get ugly out here, like a war in the ephemeral mist.....
    8 Nov 2012, 10:20 AM Reply Like
  • oh, now we're waxing poetic, gt? LOL. :)
    8 Nov 2012, 11:35 AM Reply Like
  • Desperate act to try to support price.
    8 Nov 2012, 09:57 AM Reply Like
  • Yup. AAPL continues to be in freefall
    8 Nov 2012, 10:06 AM Reply Like
  • are you still here? you have been outed once already.
    8 Nov 2012, 11:48 AM Reply Like
  • Wow, bitter about AAPL's stock price lately, huh?
    8 Nov 2012, 12:13 PM Reply Like
  • Not at all. My puts are up 150%.
    8 Nov 2012, 12:31 PM Reply Like
  • I'am sure apple will not miss the holiday sales. Not in America. Here in Europe, we have 4 to 5 wks waiting list for IP5. IP4S has also a 2 wks waiting list. GSIII is selling well but not as good as IP5 even after all those negative revues on IP5. Apple map is even better accepted than the google map. we dont experience those minor problems US iusers were talking abt. I'm sure Samsung's competition will take Apple to much more inovation. Since 2000, every 3 or 4 years there has been a new product. So many updates on the existing ones announce a future new product for 2014 or may be late 2013.
    8 Nov 2012, 10:06 AM Reply Like
  • Its getting closer to a bounce. Let the AAPL sellers finish. Nibbled at $548... will add.
    8 Nov 2012, 10:08 AM Reply Like
  • I bought some at $581 but had a stop in at $569 so I lost a little money.


    It's a great company but it's also become a high beta trading stock so it's prudent to use stops because none of the bullish articles or analysts have gotten this right so far.
    8 Nov 2012, 10:22 AM Reply Like
  • $AAPL Christmas may have competitors but so what...
    8 Nov 2012, 10:36 AM Reply Like
  • An interesting perspective on how option traders and market makers move the market against real investors who own stocks and are invested in companies for the long term.
    8 Nov 2012, 10:37 AM Reply Like
  • the recent share price action is crazy. pessimism exudes ..I invest on fundmentals and am long Apple....maybe I take an esoteric view thinking that the company will perpetually new quinitesscant innovations ....
    8 Nov 2012, 10:46 AM Reply Like
  • Pain! pain! pain! It is really gut check time
    8 Nov 2012, 10:54 AM Reply Like
  • If you loved AAPL at $700, you'll certainly love it at $545. Shall I sign you up for 500 shares or 1000?
    8 Nov 2012, 10:59 AM Reply Like
  • i think apple should not introduce a new iphone next year until the demand for iphone5 has been filled.


    people are going to be pissed after waiting months for their iphone, only to find out an update is coming out.
    8 Nov 2012, 11:23 AM Reply Like
  • it will dip to 530.


    then nibble if you want
    8 Nov 2012, 11:28 AM Reply Like
  • I trust the quality of management, their integrity and their ability to compete quite well even against the best. One of the best managed companies on the planet can stay in leadership position long term. It's not just today's products that we should rely on but their ability to continue to thrive.
    8 Nov 2012, 12:18 PM Reply Like
  • The negativity in the market and the public psyche is more driven by Obama being re-elected, the fiscal cliff, Obamacare and higher taxes looming, Democrats and Unions wanting to redistribute wealth with no real understanding or concern with how innovation and entrepreneurship works, the skew towards socialism and bigger government (as our leading industry) vs capitalism. ONLY a company like Apple has the ability to swim up stream in this torrent. We all know if Mitt had been elected, the opposite effect to the market and positive growth would be self evident. Slow slog ahead for another 2-4 years. Thankfully, Apple is blazing their own trail and ignoring analysts, haters and manipulators.
    8 Nov 2012, 12:27 PM Reply Like
  • try not to get political on this site, otherwise here here.
    8 Nov 2012, 04:48 PM Reply Like
  • Seems it has been a long upward swim against the torrid currents as you say for apple...that is why their shoulders are so strong and broad.. changing sports metaphors.. apple is more of a marathon runner than a 100 meter sprinter
    8 Nov 2012, 12:51 PM Reply Like
  • what is the guy, Mr. Munster. What does he say about this journey to hell for Apple stock? Where is he hiding when we need him?
    8 Nov 2012, 02:13 PM Reply Like
  • I went into a phone shop and asked the clerk: "I would like to have a mobile. What would you recommend?". Then a lady (about 30) said. Whoa - that I would like to listen in on. But immediately the second clerk pulled her to the other end of the store, and I could hear that he was talking about Samsung, as did my clerk, who began to demonstrate the glory of a Galaxy. Then I admitted, that I was playing with covert cards, and that I had a iPhone 3gS in my pocket, and was come to get the iPhone 5, I had been waiting for, and which they had emailed was arrived.
    The fact is, that most clerks are young geeks, who are fascinated by all the extras that Android can, and do not go very high up in ease of use.
    When I bought my 3gs, my wife should also have a new phone, so because I also am a bit of a tech geek, I bought a HTC Desire to see what Android was. I should not have done that. I had to constantly help my wife to find out, and I did not think it was user friendly, compared to my iPhone, so we sold it again with a loss.
    I am convinced, that if all potential mobile buyers in the world were given a five minutes presentation of an iOS and five minutes of an Android phone, sales of iPhones would be much higher. In the long run, those who have bought a less userfriendly Android, will next time buy a userfriendly iOS based mobile.
    Don't blame my english - blame Google translator, which I by the way think is gorgeous
    8 Nov 2012, 02:51 PM Reply Like
  • The market comment on Steve Job is dead, and Apple has lost its lust, therefore the stock is beaten down. This is another nonsense from some of the analyst. Lust usually means hype, and something in the future (can even be far future), therefore translate into a stock at a much higher P/E, such as Amazon. Apple's stock is never at the P/E ratio of 13 - 14, which is extremely reasonable, and based on solid company financials and performance. No lust or hype has ever built into its stock value. So the "lost lust" is just another nonsense from the hedge funds trying to play AAPL down for their advantages
    8 Nov 2012, 03:10 PM Reply Like
  • Hedge funds are probably rolling on the floor laughing. This is a total sand bag. We're almost half way through what will almost certainly be one of the most profitable quarters in history and the stock is selling off like the company's on the brink of bankruptcy. The further they can get the stock pulled back, the sweeter the ride back up into earnings.
    8 Nov 2012, 03:44 PM Reply Like
  • Earning estimates are coming down and they have No new products coming out next year .T.V is a pipe dream . Its been a great ride like Ive been saying the last month but the stock trades on new products ,new ideas ,and neither is on the horizon. I wonder what rock Andy Zaky is hiding under after the 1000 call last month !
    8 Nov 2012, 09:31 PM Reply Like
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