macnn
07/22/2008, 3:20am, EDT
Tuesday, July 22nd
Apple given 'Buy' rating, $220 target
Despite Apple's heavy losses overnight, research firm AmTech is predicting Apple's stock will reach $220 per share and is rating Apple a 'Buy.' Apple gave unexpectedly cautious commentary on its future gross margin predictions in its quarterly report Monday, surprising investors expecting higher estimates. While Apple's current numbers were solid, Apple's commentary on 2009, predicting a lower 30 percent gross margin, surprised AmTech and other research firms. Apple was expected to predict gross margins in the 33- to 34-percent range.
Apple's lower 2009 guidance may be explained in its alert to 'product transitions,' possibly alluding to lower prices for Apple's product lines as it looks to compete in a slowing economy. Higher raw-material costs may also have influnced Apple's lower predictions.
AmTech believes that higher growth in iPhone sales will bring Apple a higher gross margin than it predicted, forecasting a 32.8 percent gross margin and a stock price nearing $220. With the likely pullback on stock price in the near term (Apple's stock dropped 10 percent following its earnings release yesterday in afterhours trading) due to Apple's conservative estimates, AmTech sees a buying opportunity for long-term investors.
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$220?
and with steve jobs dying?... haha yeah right.
NOW IS THE PERFECT TIME FOR ME TO TRANSITION TO THE NEW COMPUTING ERA AS A RULER!
Apple will come to it's knees begging for my technologies.....
WAIT!... Did I just say that out loud? Guess I need help :( testudo! where are u when it's least important!?!
Stock Commentary
Anyone else find it irritating when MacNN posts things like, "Despite Apple's heavy losses overnight, research firm AmTech is predicting Apple's stock will reach $220 per share and is rating Apple a 'Buy.'"
Do they even realize the two are unrelated? It'd be like saying, "I plan to go skiing this winter even though it's hot this summer."
Yes those comments are
annoying, but if the economy turns around, I think Apple's stock price will move quickly upward. Forgive me, but that's what I WISH to believe. Considering what happened to Sandisk and VMWare today, Apple is looking pretty good. Looking at the stock 24 hours later, Apple really didn't get pounded as hard as any of them. if that's a consolation. Maybe in a week or so, June 21st will be long forgotten. I'm trying to stay optimistic. I don't see any other tech stock to jump to that's in a better position to climb.
There's still no solid proof that Steve Jobs is dying any sooner than any of us. I've known people diagnosed with cancer that lived for several years and I've known supposedly healthy people who died right after eating a meal. No guarantees on lifespan, people.
iPhone 3G profits
When Apple amortizes sales of iPhones they have more limited effect near term on profit margins. Many miss this lag; and the shift of profits over 24 months. As sales volumes increase their profit switch into following quarters will increase profit margins well into the future.