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."