updated 09:00 pm EST, Wed January 18, 2012
Won't back away from 22 percent sales estimate
Barclays Capital analyst Ben Reitzes is not prepared to lowered his estimate of year-end Mac growth down from 22 percent, despite recent data from research firm NPD that showed Macs growing at about half that rate in the US, reports Barron's columnist Tiernan Ray. Reitzes is reiterating a $555 price target for 2012, rating AAPL "Overweight" and says the company will again outgrow the rest of the computer industry in PC sales.
The Barclays reiteration is seen as a reaction to a cut of Mac estimates by Piper Jeffray's Gene Munster, who cut his estimate of Mac growth from 25 percent to 18 percent due to the NPD report, but noted that this was still well above the industry average. Apple was the only one of the top five computer makers to grow shipments at all in the previous quarter, gaining 11 percent year-over-year compared to losses by the others ranging from eight to 23 percent compared to a year ago.
Reitzes (and to a lesser extent Munster) believe that the US will not be the major source of growth for Apple in the fourth, but rather that rapid expansion in China and growth in other foreign markets will make up the difference between US growth (which would still be industry-leading, just not as high as previously predicted) and total sales. Apple already ascribes around 50 percent of its sales to non-US markets, and China grew 270 percent year-over-year as reported in the previous quarter.
Sales in China (led by the iPhone and iPad) have exploded in recent years, going from two percent of Apple's revenue in 2009 to 16 percent in the last quarter of 2011, increasing revenues more than four-fold from 2010. CEO Tim Cook made special mention of China in last quarter's conference call, saying "In my lifetime, I've never seen a country with as many people rising into the middle class buying what Apple makes." He called the country "an area of enormous opportunity."
Reitzes also took the opportunity in his report to investors to praise Apple for its decision to join the Fair Labor Association (the first tech firm to do so) and disclose both its suppliers and the actions taken to reduce abuses and improve working conditions in its Supplier Responsibility Progress Report, released last Friday.
Apple will report its fiscal Q1 2012 earnings on January 24th. [via Barron's]