Apple analyst Gene Munster

As we approach Apple Inc. (NASDAQ:AAPL)’s March quarter report tomorrow, Piper Jaffray analyst (and ‘Apple Guru’) Gene Munster continues to feel that March Street expectations still appear too high and that Apple is likely to guide June down. Gene Munster believes this is well accepted among investors, but believe with the dynamic of numbers coming down, it is difficult to predict what the stock will do in immediate reaction of the quarter and guide.

Additionally, Munster believes the questions more important than June guidance are how Apple Inc. (NASDAQ:AAPL) can reaccelerate iPhone growth and the level of cannibalization from the cheaper phone. All in, Munster believes that as we get past the March results and look forward to the product launches through the rest of this year and into next year paired with the ultimately reset numbers, He believes that ‘the stock can work’. Furthermore, he reiterates the firm’s Overweight rating and $688 target for shares of Apple Inc. (NASDAQ:AAPL).

Thoughts On Buy Side Thinking

Gene Munster believes that the buy side is expecting Apple Inc. (NASDAQ:AAPL) to sell 35 million iPhones in March and 27 million in June compared to the Street estimates of 36.5 million and 29.5 million. Piper Jaffray is forecasting 35.5 million and 26 million, respectively.

Additionally, on gross margin, the buy side is likely looking for Apple Inc. (NASDAQ:AAPL) to report 38% compared to the Street at 38.5% in March and 38% compared to the Street at 38.6% in June. Munster believes there is risk that the actual gross margin guide is below the buy side given lower contribution from highest margin iPhone in June. Buy side expectations are based on a survey of buyside investors between 4/8-4/19, which can be found below.

Apple AAPL Gene Munster on the buyside

For the 13 weeks ended 29 December 2012, Apple Inc. (NASDAQ:AAPL) revenues increased 18% to $54.51B. Net income increased less than 1% to $13.08B. Revenues reflect Greater china segment increase of 67% to $6.83B, Americas segment increase of 15% to $20.34B, Greater China segment increase of 67% to $6.83B, Americas segment increase of 15% to $20.34B, Retail Sales increase of 5% to $6.44B, Number of Units Sold – iPhone increase of 29% to 47.8M.