raman kandola

Wall Street Breakfast: Must-Know News

Citi raised target from $ 212 to $ 248 24-Apr-08 04:32 am Correct story line #2, thanks Emerald, Ouch

Citi raised target from $212 to $248
24 April 2008, Apple Inc (AAPL), Citi raises target.


Unit Shipment Upside in ALL Product Categories;

Reiterate Buy

Call — Apple remains our top hardware pick through calendar year-end, with a new $248 12-month target, following a 7-8% revenue beat (Google also beat by 7-8%) with upside from all product lines in 1CQ08. A steady stream of new product announcements between June and September should allow the company to continue to gain significant market share in PCs and handsets during 2HCY08. Component Tailwind in 2CQ — We had expected higher gross margin in 1CQ and now believe that Apple entered the quarter with a significant amount of memory inventory procured at higher prices during 4CQ. However, as Apple procures memory in 2CQ at prevailing contract prices, the company should benefit from the component cost tailwind that we had expected last quarter.

9 June is D-Day for 3G — The first of an impressive wave of new products will be a new 3G iPhone and the iPhone Software Development Kit (SDK). During
the subsequent three months, we expect a complete refresh of the laptop and iPod lines. The SDK should yield hundreds of compelling iPhone/iPod touch
third-party apps for by Christmas. Little Change to Above-Consensus FY09/10 Ests — An increase in revenue
estimates for all future periods is mostly offset by more-conservative assumptions on monthly residuals from cell phone carrier partners. We have reduced carrier residuals in anticipation of more traditional carrier relationships with forthcoming carrier partners around the world.