updated 05:05 pm EST, Tue February 24, 2009
Kaufman AAPL downgrade
Apple may do worse than previously expected in the financial quarter ending with March, according to Kaufman Bros'. Shaw Wu. The analyst comments that while Apple was recently able to return to the $100 price point with its shares, it has since slipped again, in what Wu attributes to a general market sell-off, and overall worries about Apple's growth potential in the context of a global recession. Worsening matters is Apple's signature iMac desktop, which supply chain checks are said to show is not selling well.
This is believed to be because of a drawdown in inventory, as well as buyers waiting for an expected hardware upgrade. Kaufman predictions for total Mac shipments in the March quarter are being reduced from 2.4 million to 2.2, in turn contributing to lowered revenue expectations of $7.7 billion instead of $7.8 billion. The firm's EPS forecast remains at $1.06, though Wu notes that both figures are below consensus values of $8 billion and $1.08, respectively.
iPod estimates are holding at 9.8 million however, while iPhone figures are being pushed from 3 million to 3.2. A truly positive quarter is believed to be dependent on Apple resuscitating the iMac, but Kaufman is said to be keeping to the view that a refresh could happen as late as June.
In the long term, FY09 predictions have been dropped from $35.2 to $34.8 billion in revenue, with a consistent $5.20 in EPS. FY10 EPS is also unchanged at $6.45, but revenue is forecast to be $41.3 billion instead of $42.2. The price target for shares is $120.