Investment bank expecting strong Mac sales
Posted by Dennis Sellers 
Oct 11, 2007 at 12:17pm
Investment bank Goldman Sachs has raised its price target on Apple from US$165 to $195 from $165, citing, among other things, strong Mac sales. Analyst David Bailey, in a letter to clients, said that the computer sales should drive revenue, gross margin, and earnings upside versus Wall Street’s consensus estimates for the company’s recently-ended September quarter.
“Better-than-expected component pricing, mostly in DRAM, and a richer mix of Macs—including a rebound in Apple’s commercial desktop (Mac Pro) on the back of the Adobe CS3 upgrade cycle—should push gross margin to around 32 percent, 250 bps higher than the company’s target,” he wrote.
Bailey also thinks iPod and iPhone sales will hit 11.3 million and 810,000 units, respectively. Along with his price target hike, the analyst increased his revenue estimate for the quarter to US$6.1 billion from $5.8 billion (compared to the company target of $5.7 billion and the Street’s $6.0 billion) and his earnings-per-share forecast to $0.85 from $0.75 (compared to the company target of $0.65 and the Street’s $0.83).
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
