Kaufman on new Macs

Analyst Shaw Wu of Kaufman Bros. has rated Apple a buy in response to today's refresh of the desktop Mac line. New Mac Pros, iMacs and Mac minis were all announced, with upgraded CPUs and graphics cards. Wu says he is pleased with the earlier-than-expected refresh, and positive on the price drop for the base 24-inch iMac, now $1,500 instead of $1,800. The analyst is disappointed in the entry-level iMac's cost -- which remains at $1,200 -- and prices for the new Minis, which still start at $600. More aggressive cuts would be better in light of the global recession, he suggests.

Apple is, however, said to be good at pricing products for optimizing growth against profits. Wu estimates that the new Macs could add 100,000 to 200,000 in incremental units, providing an upside to Street expectations of 2.2 to 2.3 million in Mac sales for the next quarter. Because Apple is trading under $90 per share and has hovered in the $80-100 range, Wu sees a healthy risk-reward opportunity and offers a $120 price target based on a 15x multiple of 2009 financial estimates.

Also factoring into Wu's positive rating is an early look at Safari 4 for both Mac and Windows, which he considers a "trojan horse" for the Mac platform due to Apple's horizontal integration. Because of common technologies and interfaces, a user who has learned one Apple product can quickly pick up another. Integration also helps Apple maximize the value of its research and development, lowering costs. Safari for Windows' speed should in theory pull in new Windows users, and its interface, mirroring the iPhone and Mac, may make a Windows-to-Mac switch that much simpler for the average person.

by MacNN Staff