Today, Apple Inc. (NASDAQ:AAPL) unveiled pricing discounts as part of its special one-day shopping event. Analyst from Topeka believe this holiday season will belong to Apple as the product lineup has never been stronger with a recent refresh across 80% of the portfolio.
• 2012 Black Friday deals similar to 2011.
Apple’s Black Friday promotions mirror that of 2011 in terms of its major products with discounts ranging from 4-10.6%. Early checks suggest demand continues to be robust with strong store traffic through the week and early Friday. Popular products based on Wells Fargo’s analysts visits include iPad Mini, iPad 2, Macbook Air/Pro, as well as Lightning cables and adapter. Analyst from Wells Fargo reiterate their Outperform rating and $710-730 valuation range.
• No promotions on iPad Mini; ship times still two weeks; still see as high on the must-have holiday list.
Unsurprisingly, Apple Inc. (NASDAQ:AAPL) is not offering any Black Friday promotions for its iPad Mini given end demand. Ship times remain two weeks for both the WiFi and 3G models. Wells Fargo research firm believe iPad Mini is proving to be a must-have holiday item and while the research firm expect lower priced competitive tablets to draw attention as well, they note that the firm do not expect Apple Inc. (NASDAQ:AAPL) to maintain its dominant unit share though do expect it to dominate profit share (while the analysts from research firm estimate Apple accounts for 53% of the PC industry’s profit share despite less than 5% unit share, they expect Apple to have a more dominant unit/profit share in tablets). The research firm believe Apple Inc. (NASDAQ:AAPL) is on track to meet or exceed their 20.2 million iPad forecast for the December quarter.
• No promotions on iPhone 5; ship times improved recently despite continued strong demand.
Similar to last year, Apple is not offering promotions on its iPhones. Ship times improved to 2 weeks from 3 weeks within the last week and, in line with analysts checks, suggests improvements in supply chain as end demand continues to be strong. Wells Fargo research firm continue to believe Apple Inc. (NASDAQ:AAPL) is on track to meet or exceed our 46 million iPhone forecast for the December quarter.
• New iMacs still not shipping, but see strong pent up demand.
Apple’s new iMacs are still unavailable as of Friday (11/23) with no capability of preordering. The research firm believe pent-up demand is high with the iMac not having seen a refresh since May 2011 (one of the longest stretches between new product upgrades for Apple). Analysts forecast 1.15 million iMacs in the December quarter (up from 968K in September) and 5.1 million total Macs (iMac and MacBook).
Wells Fargo’s valuation range of $710-730 is based on a P/E multiple of 14x our FY2013 EPS estimate of $50.30. They believe risks for Apple Inc. (NASDAQ:AAPL) are ASP/gross margin pressure, slowing growth due to tough comparisons, evolutionary versus revolutionary steps in innovation, legal disputes, macro and potential for supply constraints.
Wells Fargo research firm believe Apple Inc. (NASDAQ:AAPL) shares are under-appreciated heading into what they expect will be the largest product cycle in consumer electronics’ history in the iPhone 5. Analysts from the firm believe Apple’s combination of brand, innovation, and ecosystem are unmatched and see the company as well-positioned to continue to take value share in its core smartphone, tablet, and PC markets.