Bank analysts scurried to issue new reports last night on Apple (AAPL), following news that CEO Steve Jobs had resigned and would be succeeded by chief operating officer Tim Cook. Here is a sampling:
Ben Reitzes of Barclays
$515 per share price target remains unchanged
“While we do not believe that Steve Jobs is replaceable, it is worth noting that Tim Cook is a proven executive who can handle the pressure and knows how to run the inner workings of Apple in Jobs’ shadow. While the stock could see some immediate headline pressure, we expect sentiment to rebound through next year with strong execution and new product cycles.”
Mark Moskowitz of J.P. Morgan
$525 per share target price remains unchanged
“Discounted stock valuation had been anticipating CEO change. In 2011, there has been a divergence in Apple’s stock valuation and consensus estimates. As revenue and EPS estimates continued to go higher and in a big way, valuation multiples compressed. In our view, the compression of Apple’s valuation multiples reflected investors preparing for the day when Steve Jobs is no longer CEO. In the near term, we expect the stock to be under pressure but not encounter a downdraft, as a CEO change had been partly discounted.”
Keith Bachman of BMO Capital Markets
Price target lowered from $465 to $445 per share
“Clearly negative – while we concede that Steve has been an unparalleled creativeforce in the technology landscape, we also believe that Steve has 1) institutionalized awell understood and optimized product creation process, and 2) brought many of thebrightest minds to Apple. Many senior people have left Apple over the past fiveyears, and Apple products have continued to do extremely well in the market… We believe that Steve’shealth should be reflected in the risk rate of Apple’s long-term earnings power, or P/E multiple, not in changes to our near-term earnings estimate.”
Chris Whitmore of Deutsche Bank
$500 per share target price
“We believe Cook is a highly capable executive and deeply familiar with Apples’s business plans, product roadmaps and operations. He has also acted as interim CEO on previous occasions and we see very little near term execution risk… Looking forward, we believe risk is more likely to be centered around Apple’s 3-5+ year product plans if/when Jobs permanently departs.”
Maynard Um of UBS
$510 target price remains unchanged
“We would view any weakness as opportunity given our expectation for strong Sept and Dec quarters. We believe the company should also consider a share repurchase given its cash balance, which we think is generally more of a possibility with mgmt
change and which we believe would be a positive catalyst.”
