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AAPL Stock: 119 ( + 1.4 )

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UBS raises AAPL target to $170, pushes buy rating

updated 04:25 pm EDT, Mon August 10, 2009

UBS raises AAPL to $170

UBS analyst Maynard Um has issued a new investor note, raising Apple's stock target from $160 to $170, while calling for a "Short Term Buy" rating. The new target is based on the assumption of a higher cash balance by the end of FY10. The rating is based on a more complex set of factors, but mainly a full quarter of refreshed MacBook sales, as well as continuing expansion of the iPhone 3GS to other countries. Whereas the iPhone 3G launched in 21 countries, the 3GS debuted in only eight.

Expanded iPhone sales in general may aid short-term profits, as could new iPods, and an unknown product thought to be coming to Verizon. Speculation has held it to be a 10-inch tablet, equipped with a 3G connection and a variety of iPhone-style apps, running simultaneously. A potential risk for investors is said to be gross margins, which could help or hinder Apple depending on whether people buy more expensive iPods and iPhones, and/or gravitate to Apple Stores when ordering Macs.

In all areas the company is said to be vulnerable to component pricing, which is currently a "wild card," according to Um. FYQ4 margins also tend to slide sequentially, but could be balanced this year by the 3GS and higher-profit iPods. Mac sales are predicted to continue rising from Q3.




by MacNN Staff

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  1. climacs

    Joined: Dec 1969

    -1

    go out on a limb

    there UBS... a whole $6 above its current price!

  1. Constable Odo

    Joined: Dec 1969

    -1

    This guy is brilliant

    and he reasoned all this out by himself. It appears Apple cannot keep up with demand for the iPhone 3GS and it's not even in all the countries yet. This quarter Apple will probably sell 7 to 8 million iPhones and in Um's infinite wisdom he kicked up Apple's target price $10. Whoop-di-doo.

    Undoubtedly the MacBook line will do well, though I haven't heard much about the iMac sales lately. I need to go to a couple of Apple stores and see what's kicking about. I'll bet that Windows 7 upgrade will send a lot of PC users running to Apple. If they're gonna start from scratch, they might as well do it right.

  1. Oh Blah Dee Blah Dah

    Joined: Dec 1969

    0

    iPhone Profits LONG term

    RE: "Expanded iPhone sales in general may aid short-term profits ..."

    =====================
    Revenue for iPhone is booked over 24 months, and are therefore considered long-term profits. Short-term profits are booked immediately.

    Maynard Um is a embarrassment to the analyst community.

  1. testudo

    Joined: Dec 1969

    0

    Re: iPhone profits

    Revenue for iPhone is booked over 24 months, and are therefore considered long-term profits. Short-term profits are booked immediately.

    First off, there's no such accounting term as 'long-term' or 'short-term' profits. The iPhone is 'subscribed', so the revenue earned is split evenly over a 24-month period.

    Hence, a portion of each sale is recorded in the 'short-term', as in 'the next quarter's or two's financial statement' and thus would affect short-term profits (not as much as an iPod sale would, however, whose total value is recorded at once). Just because the entire revenue is not recorded at once does not discount the affect on the short-term profits for a company.

    Not to mention that you assume it was the analyst who wrote this, not just some MacNN editor.

    Maynard Um is a embarrassment to the analyst community.

    You aren't adding much to that community either.

  1. LouZer

    Joined: Dec 1969

    -1

    Re: go out on a limb

    there UBS... a whole $6 above its current price!

    So you criticize him for making an 'easy' call. And if it never reaches $170, you'll criticize him for not predicting correctly.

  1. bjojade

    Joined: Dec 1969

    +1

    When is the target?

    That's a detail that's never factored into these predictions. Is this a target price for next week, or for next year?

    If it's next week, then buying stock today makes sense. If next year the stock is still at $170, then it was a pretty blah investment as that's only a percent or two above what it is today.

  1. LouZer

    Joined: Dec 1969

    -1

    re: target?

    Well, it's a Short term buy, so I would assume the target is within the next 3 months or so.

  1. thewebdrives

    Administrator

    Joined: Dec 1969

    0

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