Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Robert Smith who wrote (25361)	7/8/1999 7:30:00 PM
From: Louis Gray	Respond to of 213173

Upgrade, New Enthusiasm Help Boost Shares of Apple By LISA BRANSTEN THE WALL STREET JOURNAL INTERACTIVE EDITION SAN FRANCISCO -- Optimism about quarterly results due out next week, early enthusiasm for MacWorld trade show and an analyst upgrade joined forces Thursday to boost shares of Apple Computer. On the Nasdaq Stock Market, shares of Apple advanced 4 5/8 to close at 54 1/2, lifting them to a new 52-week high and helping them continue the tear they've been on since the end of last month. Meanwhile, the Nasdaq Composite Index gained 28.82 to close at 2771.86 and Morgan Stanley's high-tech 35 index rose 16.01 to 1201.53. The Dow Jones Internet Index was up 5.35 to 260.60. Early Thursday, Alex Mou, an analyst at BancBoston Robertson Stephens, upgraded Apple to "buy" from "long-term attractive" and put a price target of $75 on the shares. Mr. Mou expects the company to report strong numbers for the third quarter, which ended in June, and said he expected that to be followed by solid numbers for the fourth fiscal quarter. In upcoming quarters, he added, sales are likely to get a boost from the introduction of a new portable computer for consumers that many people believe could happen as soon as the mid-July MacWorld Expo show. He also said the company would likely benefit from software upgrades due out early next year. The company has been on a roll of late in part because of the popularity of the iMac computer it introduced last August. A combination of sharp cost-cutting and strong sales of the iMac helped lift Apple into profitability at the end of 1997 after it had run up nearly $2 billion in losses. Yet, despite the excitement about Apple, analysts remain divided about the longer-term outlook for the once struggling company. Of the 19 analysts who cover the company, four have it rated "strong buy," four have it rated "buy" and 11 have it rated a "hold," according to a survey conducted by First Call. Don Young, an analyst at PaineWebber, has Apple shares rated "neutral" and said he thought they were fully valued back when they were trading in the mid-40s. Mr. Young is expecting earnings and revenue growth to continue to be strong, but he says that growth is coming off periods of very weak numbers -- and that growth may appear to slow down once results are compared to quarters where sales were stronger. "You've got to give them a lot of credit for what they've done," he said. But he added the company's operating system is becoming less and less important as a platform because of its tiny market share, so long-term optimism doesn't necessarily make sense. Walter Winnitzki, an analyst at Hambrecht & Quist, said he had "middle of the road" feelings about Apple, which he has rated "market perform." The company has done a good job of streamlining its manufacturing process and cutting costs in that area, he said. He said strategy to position computers as Internet-access machines made Apple's sliding operating-system market-share less of an issue. He said, however, that the company may face pressure later this year because PC prices may fall as low as $600, about half the price of the iMac, which now retails for $1,199. Meanwhile, Lou Mazzucchelli, an analyst at Gerard Klauer Mattison & Co. and a longtime Apple bull, said he was pleased that at least some others seem to be turning more positive on the company. He said the company appears to be gaining traction in the consumer and education markets and that should be enough to help Apple have continued earnings growth of 20% to 25% and revenue growth of 15% to 20%. He added that he isn't worried that Apple has yet to make inroads with business users since the company was never strong in that area. Mr. Mazzucchelli has the stock rated "buy" and believes the shares should hit $60 in the next twelve months. "I think there's likely to be some profit-taking ahead of earnings, but then as people get comfortable with what the prospects for the end of the year are [then] we're likely to see some appreciation," he said.