iPod, Snow Leopard sales predictions raise AAPL target
updated 03:55 pm EDT, Fri October 2, 2009
Nano 5G, $200 Touch generate strong sales
Analyst Shaw Wu of Kaufman Bros. has raised his estimates for Apple, in spite of poor economic signs. The increase is tied to strong momentum from iPod and Snow Leopard sales. The new video-capable iPod nano is said to be leading the way, while the new Touch -- as cheap as $200 -- is described as strong, despite missing rumored additions. Games, meanwhile, are generating more interest in the Touch and iPhone than originally expected. Snow Leopard's $29 price is seen as a major driver in consumption of the new OS.
Wu is raising iPod shipping estimates from 10.7 to 11 million units for the September quarter, and expecting a higher gross margin, jumping from 34.2 to 35.2 percent based on Snow Leopard sales. The analyst now expects $9.1 billion in revenue and $1.41 in EPS, up from $8.9 billion and $1.29; both sets of numbers are far ahead of Apple guidance, calling for between $8.7 and 8.9 billion in revenue and $1.18 and $1.23 in EPS.
The 12-month price target for Apple has been upgraded from $184 to $214. Wu also mentions positive reactions to limited supplies in Mac channels, indicating a refresh or at least high demand. Predicted quad-core iMacs and a tablet are driving expectations.
Wu's observations follow closely on the heels of UBS and Morgan Stanley raising expectations earlier today.
