JPMorgan upgraded Apple (Nasdaq: AAPL) stock to “Overweight” from its previous rating of “Neutral” this morning. The reason behind this leap in confidence? The Wall Street heavyweight argues that Apply is protected “from the cold winds of a consumer downturn.”
In other words, Apple is setup with a nice cushion between its revenue stream, products and the current economic downturn. JPMorgan analyst Mark Moskowitz told investors: “We think that Apple’s brand and market share momentum offer meaningful buffers” despite 70-75 percent of Cupertino’s sales relying on the consumer. He goes on to acknowledge that even Apple won’t come away unscathed from the current market slump in consumer spending: “Apple likely has a backstop beyond the first round.”
With Moskowitz calling Wall Street’s worries on the economy’s impact on Apple sales “overdone” he has revised JPMorgan’s revenue expectations for 2008 decreasing projected earnings from $32.445 billion to $32.423 billion. (Meanwhile, projections for 2009 have decreased from $40.26 billion to a still impressive $36.98 billion.)
All of this Wall Street Mac praising optimism comes on the coat-tails of Tuesday’s announcement of a price-cut to $999 on an entry-level MacBook. With Apple’s most popular laptop now prepared to enter the market of low (okay, lower) cost computers, Apple has once again positioned itself to absorb more of the PC dominated industry.
Even amongst all of the Mac computer hoopla, Mr. Moskowitz didn’t fail to throw in a little iPhone enthusiasm: While Mac are not likely to make more inroads into the enterprise (low cost computer market), the iPhone could unlock that door. “We think the iPhone could be a stepping stone to penetrate the enterprise.”
Apple will be releasing Q4 earnings results next week, on Tuesday October, 21.
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