AAPL Stock: 123.38 ( + 0.61 )

Printed from

Apple 'growth story' expected to survive recession

updated 11:55 am EST, Tue November 25, 2008

Kaufman on Apple prospects

Apple is likely to continue growth in spite of a looming recession, says Kaufman Brothers' Shaw Wu. Formerly with American Technology Research, the analyst notes that Kaufman is starting its coverage of Apple by posting a "buy" rating and suggesting a 12-month price target of $120. This was calculated using a 15x multiplier on its CY09 FCF estimate, which is $7.89.

Wu notes that while his new firm is worried about the current economic crisis, which is global and turning into a recession in many regions, Apple is still in a position to continue growing its share of the marketplace. This is attributed to several products, namely the new aluminum MacBooks, the iPhone 3G, the fourth-gen iPod nano and the newly cheaper second-gen iPod touch.

Worldwide, Macs are said to represent only 3 percent of the market, despite year-over-year growth of 30 to 50 percent during the last two years. Wu suggests, as a result, that marketshare could double within the next two or three years. Apple finances could be further aided by the iPhone, which already holds 1 percent of the cellphone market.

Looking to future revenue, the Kaufman firm is predicting $35.5 billion for FY09 and $42.8 billion for FY10, with EPS results of $5.05 and $6.45, respectively. This has been deliberately pegged below consensus estimates, says Wu, as a reflection of the impact of the global economy, which Kaufman hopes will recover to a degree by the second half of 2009. The group observes that the situation could improve more rapidly, in which case its estimates would be too conservative.

by MacNN Staff





Login Here

Not a member of the MacNN forums? Register now for free.


Network Headlines

Follow us on Facebook


Most Popular


Recent Reviews

15-inch MacBook Pro with Force Touch

Apple's 15-inch Retina MacBook Pro continues to be a popular notebook with professional users and prosumers looking for the ultimate ...

Typo keyboard for iPad

Following numerous legal shenanigans between Typo -- a company founded in part by Ryan Seacrest -- and the clear object of his physica ...

Entry-level 27-inch Retina iMac

The 27-inch Apple iMac with 5K Retina display is already one of the best value-for-money Macs that Apple has ever released. It was som ...


Most Commented