Wall Street has spoken up again regarding Apple and projected iPhone sales and performance through the next 24 months. BMO Capital’s Keith Bachman has cut his unit forecast for the last quarter in 2008, while reducing his earnings estimates through 2010.
It’s not surprising that the next 16-18 months may be especially tough, not only for Apple, but the entire economy. Because of Apple’s mountain of cash, and premium position globally with the iPhone, they will be able to whether the financial downturn much better than many of their competitors, but as we’ve explained before, Apple is not immune.
Barron’s: Bachman says that given September channel fill – 2 million of the 6.9 million units sold in the quarter went into channel inventory – the December quarter faces “a tough sequential compare.” He thinks end-market unit sales for the quarter can move up 15% from the September sell-through of 4.9 million. Ergo, he cut his forecast to 5.6 million units from 6.6 million. For the September 2009 fiscal year, he now sees Apple selling 21.7 million iPhones, down from 22.8 million. But he is increasing his FY 2010 unitforecast to 26.2 million, from 24.5 million.
For FY ‘09, he now sees GAAP profits of $5.11 a share, down from $5.20, and “economic earnings,” adding back deferred revenues, of $6.60, down from $6.70. For 2010, he sees GAAP EPS of $6.33, down from $6.42, with economic earnings of $7.55. He also trims his FY 2009 free cash flow estimate to $9.97 a share from $10.52.
Bachman keeps his Outperform rating on the stock, and his $120 per share price target. He believes that the slumping iPhone sales he is expecting throughout the end of 2008, has already reflected itself in the stock price. Although confidence in the company remains strong, Apple needs to maintain a clear head and navigate the next 16-18 months very effectively and methodically. Correlating with widely believed analysis on the current economic conditions, Apple will continue to outperform the industry, and by 2010 the stock price should accurately reflect the company’s premium market position.
Shares of Apple Inc (AAPL) have been slumping over the past 24 hours, again falling below $100 in trading today. Currently, the stock is trading at $99.26 per share down $4.04 (-3.91%).
