This Morning: Unleash the Street iPhone Hyperbole, Glum PC news, PANW Defended
By Tiernan Ray
Here are some things going on this morning in your world of tech:
It must be a truth of physics the closer one gets to an iPhone introduction, the greater the activity on the sell side.
Tomorrow is Apple’s (AAPL) media event in San Francisco and the Street is preparing its point of view.
JP Morgan this morning sounds like its expecting the second coming, with Mark Moskowitz writing that “We believe that the iPhone 5 will be revolutionary in form factor and software capabilities, contributing to a major upgrade cycle over the next 12-18 months.” Moskowitz actually teamed up with several of his colleagues for a 33-page report that explores the implications for various sectors. Among the recommendations: Avago Tech (AVGO), Broadcom (BRCM) Qualcomm (QCOM) and OmniVision Technologies (OVTI) could all be beneficiaries this year and next.
As if that wasn’t enough, JP Morgan’s economist Michael Ferolli yesterday opined that the iPhone could add as much as a half a percent to annualized GDP growth, as related by The Wall Street Journal’s Sudeep Reddy.
And Morgan Stanley’s Katy Huberty this morning reiterates an Overweight rating on Apple shares, writing that the company could see upwards of 53 million units of the iPhone next quarter, the first full quarter, and sales of 266 million in fiscal 2013.
And she advises: “We view a China Mobile partnership as the biggest potential sales catalyst in CY13 and any clue that iPhone 5 includes a chip compatible with CM’s TD network is a positive, in our view.”
Speaking of Apple, DigiTimes’s Max Wang and Alex Wolfgram report that the much-rumored “Mini” version of the iPad is being delayed by problems of yield in the manufacture of its display, citing “industry sources.” Yields on the display so far have been too low for an introduction is month, the authors write. Still, there are those who claim to have seen the thing.
Apple shares this morning are up $4.66, or 0.7%, at $667.40.
Meantime, not far away in the same town, Intel (INTC) is getting ready to kick off its annual developer forum at the Moscone Center, which commences with a keynote at 9 am from the head of the Intel architecture group, David Perlmutter. I’ll be there covering the event.
Intel shares this morning are up 32 cents, or 1.4%, at 23.58.
Tidbits this morning for the PC market continue to be mixed. Brean Murray Carret & Co.’s Ananda Baruah this morning reiterates a Buy rating on shares of drive makers Seagate Technology (STX) and Western Digital (WDC) warning that shipments of PCs and drives this quarter are tracking five million units lighter than either firm has been modeling, writing “Our mid-August update suggested that demand was tracking softer than expected, but that we believe units of 157M remained possible (in-line with Sep Q guidance). Our work also suggests the possibility of unit shipments below our 145M – 155M range is possible IF STX & WDC decide to reduce finished goodinventory levels a bit.”
Western, mind you, will host it’s analyst day this Thursday, September 13th, while Seagate will host its analyst day a week later, the 21st, so we should know more in short order.
And Brian White of Topeka Capital Markets this morning writes that data from Asian contract manufactures such as Hon Hai was in aggregate much worse than expected in August, writing “Assuming average September MoM sales growth for the ODM Monitor, we estimate 3Q12 revenue will be flat QoQ and much weaker than the average increase of 14% over the past seven years. In our OEM coverage, Dell is the most exposed to the .PC market at 50% of sales, followed by Hewlett-Packard at 29% and Apple at 13%.”
Shares of networking equipment vendor Palo Alto Networks (PANW) are down $3.91, or almost 6%, at $67.84 after the company last night beat fiscal Q4 expectations and forecast this quarter’s revenue slightly ahead of what analysts have been modeling.
Obviously, it wasn’t enough for some, but the Street today has rallied to the stock’s defense, with Todd Weller of Stifel Nicolaus reiterating a Buy rating and a $75 price target, writing that the results of its first report as a public company were “strong,” and that expectations had simply gotten ahead of the company.