updated 09:40 am EDT, Wed October 1, 2008
Citigroup vs. G. Sachs
New analysis of Apple's difficult financial situation has yielded two significantly different views. Richard Gardner of Citigroup has cut his price target for Apple stock by more than $100, down to $170 from $287. Blame is laid on a 3 percent decline in industry computer sales, and a 12 percent drop in music revenue throughout 2008. Apple's guidance, normally thought by analysts to be too conservative, may in fact prove accurate for the fourth quarter, Gardner suggests.
An EPS of $5.29 on sales of $32.68 billion is now predicted for FY08, which is just coming to a close, while FY09 figures are expected to produce an EPS of $5.43 off of $35.2 billion. Because Apple is set to grow, Gardner is still issuing a buy rating, with the observation that the company will likely outperform most rival computer, electronics and phone makers.
An analyst for Goldman Sachs, David Baily, has meanwhile kept to a higher stock target, at approximately $200. Monday's share slide more than compensated for any worries about growth in Mac sales, Baily contends, and Apple should be buoyed in the fourth calendar quarter by the iPhone. Shipments of 4.6 million iPhones and 2.7 million Macs are currently predicted for Apple's September financial quarter.