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AAPL Stock: 524.94 ( + 5.93 )

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Sterne Agee: LTE, battery, apps will continue to drive AAPL

updated 11:00 pm EST, Thu March 1, 2012

Sees further differentiation from competition

Sterne Agee analyst Shaw Wu has raised estimates on AAPL in a note sent to investors following the announcement of the March 7th press event for the new iPad. Calling the update "significant," Wu adjusted both estimates and price targets for Apple stock, saying he is now confident that the company will sell 55 million units in calendar 2012, up from 51 million. He did not change his outlook for the current quarter, estimating just 10 million iPads sold.

Wu pointed to "supply chain checks" that indicate that the new iPad will feature a "much faster" processor, Siri integration, a higher-resolution screen and LTE wireless compatibility. With such features, he is betting that the iPad will continue to easily fend off challenges, none of whom have thus far taken significant marketshare away from Apple.

The note also singled out Apple's battery technology and "ownership of core intellectual property" including battery technology, semiconductors, design and software as key factors that will continue to differentiate the iPad from the "myriad" of Android-based tablets and even Amazon's Kindle Fire. "Our industry checks indicate [Apple] has made notable progress in improving battery life that has plagued competitors," Wu stated.

Sterne Agee's new estimates for Apple in fiscal 2012 is a total of $158 billion in revenue (up from $156.4 billion) and $43.30 in earnings per share (up from $43 EPS). For fiscal 2013, Wu says the company should make $179 billion in revenue and $48.50 EPS (up from an earlier prediction of $175.7 billion and $48 in EPS). AAPL stock price targets have also been raised, to $620 up from $550) based on a conservative 12x multiple of the new calendar 2012 EPS estimate of $43.24 plus $102 in net cash.

Wu continues to rate AAPL as a "buy," saying the company is "positioned to outperform" in the current economy with "its defendable strategic and structural advantages and vertical integration."





by MacNN Staff

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Comments

  1. Bobfozz

    Joined: Dec 1969

    +4

    just ten million sold!...

    Other companies would be happy with 10% of that.

  1. climacs

    Joined: Dec 1969

    +5

    awesome

    I have AAPL in my stocks app that comes 'stock' with iPhones, and I love to read the articles on SeekingAlpha and MotleyFool and some other such sites which are linked to under 'News' in the app.

    There's always some idiot who claims that Apple is peaking or Apple is worthy of shorting or the law of large numbers is going to catch up with Apple or that Apple has no more great products up its sleeve now that Jobs is gone or other rubbish to the effect that Apple is DOOOOOOOMED. There was even one idiot a couple months back who claimed AAPL was only worth $82 a share. This was prior to the blowout 1Q12 they just had, and that's about how much cash per share Apple had on hand at the time. Needless to say, that idiot has not been seen nor heard from since then.

    The fact is that it's no accident that the iPod, iPhone, iPad and MacBook Air have all redefined their markets and taken a commanding percentage of the sales - or in the case of iPhone, the profits. Not to mention the Apple Stores, which have succeeded beyond anyone's expectations.

    I have complete confidence that Apple will continue to own the markets in which it competes, it will continue to grow sales of Macintosh computers even as the PC market as a whole matures and declines in the face of the tablet/mobile revolution, and it will begin to fully exploit the enormous potential for sales in China which it has barely begun to tap.

    Beyond that, Apple has tremendous cost efficiencies which lead to very high profit margins on what it sells. It hasn't made costly acquisition blunders like Microsoft and HP have (and it never will because Apple doesn't do mega-mergers), it hasn't poured hundreds of millions of dollars of losses into products like XBox or Kindle Fire in a desperate attempt to buy market share at any cost.

    Apple @ $1000/share? Easily. If you want to look down the road three or so years... try $1200 or even $1500 or higher.

  1. facebook_Adam

    Via Facebook

    Joined: Mar 2012

    +3

    They actually pay these guys?

    No kidding Apple is a buy. I bought 4,000 shares in the 1990's for around 16 when analysts like this guy were saying to stick a fork in the company and that Steve Jobs was a loser. I now have twice as many shares and have been very happy that I never listen to these over paid fortune tellers.

  1. efithian

    Joined: Dec 1969

    +2

    Diversify

    I have had meetings with some financial analysts over the years. When they found that I had 25% of my portfolio in one stock (AAPL) they went ballistic. I ignored their advice and kept my AAPL. Now it is worth 60% of my portfolio. My initial purchase of AAPL has returned 200x.

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