Wednesday, February 13, 2013

This Morning: Quarterbacking iPhone Again, Dell Downgrades

Here are some things going on this morning in your world of tech:

If you’re holding out for a larger-screen iPhone, you’ll have to hold out a while longer, according to a note this morning on Apple (AAPL) from Jefferies & Co.’s Peter Misek. Misek, who has a Hold rating on the stock, and a $500 price target, writes that a 4.8-inch “iPhone 6” might come in June of 2014 because of “screen yield issues.” He also thinks that “iPhone 5 sales are decelerating faster than expected and builds have been cut again from 40M to 30M” this quarter.

The story of Apple’s developing a smart watch of some kind continues to gain currency, with Bloomberg’s Peter Burrows and Adam Satariano writing that the company has 100 product designers working on such a gadget, citing two unnamed sources.

In case you missed it, Bloomberg also has a piece by Lu Wang and Leslie Picker this morning stating that the stock’s 29% discount to the Standard & Poor’s 500 in terms of P/E ratio, the lowest for the shares since 2000.

Dominic Chu of Bloomberg TV followed this morning with a brief mention that value investors are getting into the stock, including Thornburg Investments, Gamco, and Brown Advisory.

Apple shares are down 61 cents at $467.29 in early trading.

The Street continues to try to deal with the mounting uncertainty of the Dell (DELL) leveraged buyout effort by CEO Mike Dell. The Wall Street Journal’s Rolfe Winkler late yesterday wrote that data from Dealogic about LBOs since 2005 suggest Dell holders are unlikely to get much more than the $13.65 offer price.

Bernstein Research’s Toni Sacconaghi cut his rating on the stock to Market Perform from Outperform, while maintaining his $15 price target, writing that the deal will go through, “at or modestly above the current offer of $13.65 per share.” Maxim Group’s Ashok Kumar also cut his rating to Hold from Buy for the same reason.

But Brian White with Topeka Capital Markets reiterates a Buy rating and raises his price target to $16 from $13.50, writing that the “investor revolt” means “a higher bid will need to emerge.”

Money manager Don Yacktman, who had already expressed disfavor, was on CNBC this morning with Andrew Ross Sorkin, where he offered terse answers: “We think the price is inadequate.” Asked what the price should be, he said “We think it should be a lot higher than where it is. Some large investors have gone on record� I’ll just say higher, you know� The price is very inadequate.” Asked if he would vote against the deal, Yacktman remarked simply “At this price.”

Dell stock is off 2 cents at $13.77 this morning.

Shares of BlackBerry (BBRY) are up a penny at $15.21 in pre-market trading as National Bank Financial’s Kris Thompson issues a note to clients reiterating his Underperform rating, and $10 target, and cutting estimates, writing that the recently introduced Z10 handset is not enough to sustain the hardware business.

“For the record, we like the Z10. It�s a great upgrade for BlackBerry subscribers,” writes Thompson. “But we don�t see the product reversing BlackBerry�s market share decline; only providing a short-term stabilization from BB6/7 upgrades.”

Shares of Groupon (GRPN) are up 41 cents, or 8%, at $5.70 per share after Sterne Agee’s Arvind Bhatia raised his rating on the shares to Buy from Neutral, with a $9 price target, writing that he has a “constructive” view of the company’s long-term prospects.

Bloomberg’s Betty Liu reported this morning that unnamed sources have say Intel (INTC) has hired an executive search firm to look for a replacement for outgoing CEO Paul Otellini, who is retiring in May.

Intel shares are up 3 cents at $21.22 this morning.

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