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AAPL Stock: 101.57 ( + 0.61 )

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UBS bullish on Apple, ATR downgrades

updated 12:10 am EDT, Fri April 15, 2005

UBS, ATR on AAPL

Financial firms ATR and UBS both held a $50 price target for shares of Apple just days ago, but the firms expressed very different views Thursday following Apple's announcement of financial results for the Mach quarter. American Technology Research on Thursday downgraded shares of Apple to "Hold" with a price target of $46. The firm cited concerns with slowing revenue growth and high investor expectations in its report. Meanwhile, UBS remained bullish on Apple, suggesting Mac sales could see a boost over the next several quarters. UBS increased its price target to $54, and maintained a "Buy" rating.

Concern over sustainability of growth

American Technology Research said it is concerned with Apple's slowing top-line growth, as indicated by lower than expected average selling price trends in both the company's iPod and Mac businesses. Average selling price declined 28 percent quarter to quarter, indicating stronger growth in lower cost products such as the iPod shuffle. The average price for Macs declined 9 percent quarterly, with a mix shift towards the Mac mini and iMac G5. The firm also cited high investor expectations, which will likely be met by a decreasing number of "big up side surprises" in the near future. "In our view, investors do not believe AAPL's guidance and have much higher unpublished expectations."

ATR believes 2 million out of the 5.3 million music players Apple shipped during the March quarter were iPod shuffles. (In line with 's estimate of 1.8 million units).

"We continue to believe Apple remains the best-positioned to capitalize on the digital music opportunity with arguably the industry's most powerful and complete stack of hardware, software, and service." Additionally, the firm believes that Apple's Mac business could accelerate with new product momentum and as more "switchers" buy Macs.

UBS maintains positive outlook

UBS remained bullish on Apple, suggesting Mac sales could see a boost over the next several quarters and issuing a new target price of $54 a share. "While some may have expected higher iPod sales & higher guidance, we believe results are impressive in terms of margins & laptop sales ... We also believe desktop sales in March were adversely impacted by anticipation of the Tiger OS set to ship in the June quarter. As a result, Mac sales could see a boost over the next several quarters from current levels."

AAPL continues slide

Shares of Apple fell for a second day Thursday on concerns that the company might not be able to produce another blockbuster product




by MacNN Staff

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Comments

  1. climacs

    Joined: Dec 1969

    0

    googlefight

    bill gates 18.8 million
    steve jobs 18.5 million

    iPod 67.6 million
    napster 6.99 million

    mac 237 million
    pc 380 million

    allah 6,330,000
    god 142,000,000

  1. beeble

    Joined: Dec 1969

    0

    Expectations

    "In our view, investors do not believe AAPL's guidance and have much higher unpublished expectations."

    Maybe that's because APPL has exceed their guidance by a very significant margin every quarter for about a year. There's a very good reason that people don't believe Apple when they say "we're going to make $x million this quarter". They always make much more than that. And with Mac and iPod shipments accelerating, any rational person will be expecting Apple to beat their forecast yet again.

    Maybe this seems so obvious to me because I didn't go to stockbroker school. My brain is still perfectly serviceable. At least they have a target that's higher than the current share price. That's better than the chant from a year or two ago that APPL was heavily overvalued and due to crash at any second.

  1. cmoney

    Joined: Dec 1969

    0

    ATR is a bunch of idiots!

    They said they're concerned that average selling price is dropping on a quarter to quarter basis and then say it's because more iPod Shuffles and Mac minis are selling. Well duh, they just got introduced! Mac minis and iPod shuffles didn't really start selling in volume until this past quarter.

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