Andrew Neff
Andrew Neff
apple balance based capital financial future growth increasing innovative invested ownership positive potential price products rate rating reasonable return sheet strong target view
We reiterate our 'buy' rating on Apple and our price target of $80 based on valuation of two times the company's EPS growth rate of 20 percent, reasonable in view of its innovative products and strong product cycles, ownership of technology, strong balance sheet and financial management, increasing return on invested capital and potential for future positive surprises.
aggressive bound concerned consumer continued corporate demand pc pricing seeing signs spreading stocks weak weakness
When we downgraded the PC stocks in September, we were concerned about signs in the weak consumer demand -- which has continued to deteriorate. Now we are seeing signs of this weakness spreading into small/medium corporate and of aggressive pricing in low-end servers. This weakness is bound to spread.
discount ibm percent valued
We still see IBM attractively valued at a 13 percent discount to S&P multiple.
among clearer leaders-and-leadership reflects seeing thinking
We're seeing alliances, not mergers, among leaders, which reflects clearer thinking about what is good.
believe cited company demand extent industry laundry lead list problems products related specific woes
The extent of Apple's pre-announcement and the laundry list of problems that the company cited lead us to believe that its woes are as much company specific as they are industry related and the demand for products is just not there.
cyclical point worked
Our point is that, like other cyclical businesses, this overcapacity has to get worked out.
far improve
It is a show-me situation. They need to improve revenues and so far they haven't.
analyst community financial help meeting offset presence steve
Steve Jobs' presence at the analyst meeting can help to energize the financial community and offset some of the 'sell on the news' pressures.
appliance beginning business ibm network outlook positive provided revenue
While the earnings-per-share outlook was inline with expectations, Network Appliance provided a positive revenue outlook for the fourth-quarter with IBM business just beginning to ramp.
believe extend further growth lead means potential
We believe this means more growth and the potential to further extend its lead in the server arena.
fill good helps ibm margin product sell
It's good for Compaq at the margin, because it helps them fill out their product line, and it is good for IBM at the margin because it helps them to sell storage.
address behind early effective needed partner tried
They were probably a little behind the curve, but it's still early in the game. Compaq needed a partner for an ASP opportunity. They tried to address it on their own, but this is probably a more effective way to be doing it.
buy odds
The odds are long that someone would buy Gateway.
both confident continued estimate happen large law network numbers require rich strong surprises underlying unlikely upside
While we are very confident about the firm's underlying fundamentals ... Network Appliance's rich multiples require continued strong upside surprises and estimate increases, both of which are unlikely to happen near-term as the law of large numbers catches up with the company.