With Apple set to report earnings on Tuesday after the bell, investors can’t help but wonder where shares are headed next, considering they've lost about half their value since late last year.
Many investors are eager for more clarity about the new 3G iPhone that got off to a rocky start with complaints about performance. Also, over the last 3 months Apple overhauled its line of iPods ahead of the Holiday shopping season and struck a deal with NBC to bring programs such as “The Office” back to iTunes.
So what should you expect? For insights we turn to Piper Jaffray’s Gene Munster, arguably one of the more bullish analysts.
“The December quarter should be fine based on the fact they’ve basically upgraded 70% of their business,” says Munster on Fast Money. “I think they’re going to ride the Mac wave forward.”
”The rubber hits the road next year when they have to navigate the broader economy. I think the Holiday and the upgrades will get them through and then we’ll figure out what to do in 2009.”
Musnter has a buy rating on Apple stock and he expects to stock to trade higher immediately after they report.
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Not everyone is quite so bullish. Soleil Securities analyst Daniel Ernst wrote in a recent note to investors that "While we believe Apple's market-share momentum has insulated the company from economic pressures to a degree, we do not believe the company's results this quarter and this holiday will prove entirely immune."
Ernst wrote that back-to-school sales appear weaker this year than last, but that Apple's share among new computer buyers has increased dramatically.
Majestic Research analyst Richard Klugman wrote in an Oct. 6 research note that he expects "solid results" driven by aggressive back-to-school promotions and a spike in iPod sales, though he acknowledged the risk that weakening consumer-electronics spending overall could dampen Apple's performance.
In case you’re wondering, in July, Apple forecast earnings of $1 per share on $7.8 billion in sales. Analysts surveyed by Thomson Reuters forecast income of $1.11 per share on $8.05 billion in revenue.
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Trader disclosure: On Oct.20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money trader; Finerman Owns (GS), (MRK), (JNJ); Finerman's Firm Owns (MSFT); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (USO), (BBT), (COF), (IWM); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Owns (NKE) Calls; Seymour Owns (AAPL); Seymour Owns (CCJ); Seymour Owns (MER); Seygem Asset Management Owns (FXI), (VIP); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (ADM) And (ADM) Call Spread; Najarian Owns (EMC) And Is Short (EMC) Calls; Najarian Owns (FCX) And Is Short (FCX) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) Calls And Is Short (MSFT) Puts; Najarian Owns (SNDK) And Is Short (SNDK) Calls; Najarian Owns (BNI); Najarian Owns (TSO) Calls And Is Short (TSO) Puts; Terranova Owns (AAPL), (EXM), (FCX), (FTO), (MA), (NOV), (POT), (X), (VLO); Terranova Owns Dec. Crude Oil; Terranova Owns Dec. Gold;
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV;
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CNW), (OFC), (DLM), (DRH), (DLR), (EPR), (EXR), (FL), (SLB), (LNET), (MAC), (DBC), (DBV), (SKT), (UA), (BLV), (VV), (CLB), (GWX), (IGE), (FSMXX); Virtus Investment Partners Owns Seagate Tax Refund Rights; Virtus Investment Partners Owns Seagate Technology Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of Shares Of Incitec Pivot Ltd.; Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc.
