You're watching...
Brian White, Topeka Capital Markets senior analyst, weighs in on what’s expected from Apple’s earnings and Windows 8.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Up to launching its -- iPad apple is set to release its fourth quarter earnings after the bell today Brian white.
Senior analyst -- to -- at capital markets has an astounding price target.
Astounding -- joins us now.
All right -- I can't figure out might -- out what is your price target we'll start right 1111.
Which is based -- nineteen times our next year number right plus net cash per share of over a 120 dollars so actually.
Apples -- 86% a year.
Over the past seven years -- this year alone were modeling 60% EPS growth so just over 600 bucks is way undervalued is currently undervalued.
OK so what gets you there though is it China revenue from China that is that they iPhone 5 the -- what is -- about them.
So there's a lot of excitement out there obviously you know iPhone is half of their revenue -- about 25%.
-- -- and when you take a look at this iPhone 5 launch.
The only negative has been they can't make enough.
Without purpose.
It's not on purpose demand is overwhelming number one.
Number two there have been yield issues in the supply chain you know and those are not going to be lost phones sales -- are gonna occur sometime in the march quarter.
So could they lowered it guidance a little bit on that those production problems the tight supply that we've all heard about certainly -- manufacturing in China.
It's a good -- -- so when you think about apple generally they give a conservative outlook that it is below the street know our number is about three billion below the street top line.
-- -- conservative -- assume 43 million iphones.
Which is 36 million iPhone fives in the remainder forests and four it's actually been a resurgence of four estimate and as they cut prices.
With the -- phone -- so although they can't make enough of these iPhone fives there's a lot of demand for four -- Now they can answer they sold that -- 100 million I pat mining analyst panicked and that is must have been a great number.
Came and allow people -- -- -- gonna -- you worry about this quarter at all.
So iPad will definitely disappoint right -- through that number out not all the models have adjusted not all the models will hit the street consensus.
I think they can do probably a little bit better -- iPhone and make up for that but you're exactly right that implies fifteen to sixteen million ipads a lot of guys have eighteen million right now.
-- the end of of this particular quarter there reporting on just the last week was the iPhone 5 available also certainly to be -- surge and then.
But what happens -- I think -- apple there's so many rumors about what product is coming out months ahead of time -- really have an impact concert.
On a quarterly basis because people -- back waiting for the release of the latest product exactly.
So when you look at iPad one of the reasons I think got -- -- with the economy soft tech results have been a disaster -- this week -- disaster they're not immune but they're gonna do much better.
-- iPad they have a fourth generation that they announced at the iPad -- of that so what happens is that gonna worked out iPad three inventory ahead of that I think that's one of the reasons sales came in a little bit -- -- do you worry about Microsoft's -- -- is that a threat come.
Windows eight is dead on arrival you know I would I went to Taiwan recently and -- So it it'll be a challenge so granted earnings tonight are you.
Dubai to sell it what do you do with this -- and I look at apple we've got it we gotta keep in mind the things that we've highlighted yield -- around iPhone 5 what Tim Cook told us the iPad.
-- demand will be a little bit weaker in September quarter I think the sentiment has really turned negative on ample stocks come off yeah it's nine times earnings.
This product cycle is the strongest in their history you know -- the apple that I played the iPad many.
This thing's gonna be home run.
Supply constraints will be an issue December quarter but this product will be home run surpass iPad.
And iPhone 5 is off the charts it is to make enough this is all gonna work its way through.
And you're gonna see the revenue gonna see the profits you just gotta sit tight so at this level -- like the stock here.
It couldn't -- -- it down quarter for them anyway it is yet next quarter I think will be is -- -- went all right Brian white thank you so much for being here articles don't forget we don't miss fox business's extensive.
