updated 10:55 am EST, Tue December 7, 2004
Mac market to grow in \'05
Goldman Sachs today initiated coverage of Apple at "in-line," saying that Apple is "one of the few companies in tech with the ability to consistently innovate and then monetize that innovation." It also said that it , slightly higher than the industry average of 9%. Forbes reports that Goldman expects fiscal 2005 earnings of $1.51 per share and fiscal 2006 earnings of $1.85--with a bias to the upside on "multiple sources of growth coming together. Specifically, we see iPod and other music-related offerings as well as software, services, and peripherals contributing over 80% of Apple's top-line growth in fiscal 2005 and 90% in fiscal 2006." Goldman, however, said that the current stock run "has pushed its valuation. . . .leaving little room for appreciation based on multiple expansion alone."
Goldman, instead, favors entry points into Apple "when the company's and the stock's 2005 outlook can be assessed more rationally after mid-January." The firm also commented on Apple's hybrid approach to selling to customers--through resellers and direct: "With its own retail outlets and online store, complemented by a network of national and local resellers, Apple has taken a decidedly different distribution approach than any other tech company while at the same time developing a direct relationship with its customers that is second only to Dell."
Forbes says that the firm expects Apple's Mac market to grow for the first time in three years with unit shipments rising 10% in calendar 2004. "In calendar 2005, stronger sales of Apple's recently refreshed iMac and Power Mac desktops (off of easy comparisons), pull from the popularity of iPod, and the continued shift to notebooks should fuel unit growth of 10% compared to our industry growth estimate of 9%," the firm said.