Here are some things going on this morning in your world of tech:
Shares of Adobe (ADBE) are up $1.72, or almost 5%, at $37.25, after the company last night beat analysts’ estimates slightly for its fiscal Q4 but projected the current quarter and year below expectations as it transitions its business to a subscription format. That’s supposed to produce a better quality of earnings and revenue, over time. The stock got one upgrade, that I can see, to Outperform, from JMP Securities‘s Pat Walravens, and one downgrade, to Neutral, from Janney Capital. There were also several price target increases.
As Citigroup’s Walter Pritchard explained it this morning, as he raised his price target on the shares to $42 from $38, “There has been controversy around the impact of a transition to subscription. The debate will now turn from the subscription transition to �what do you pay for it�. We are raising our DCF-based target to $42 based on higher out-year numbers, but we believe a �mid-teens� multiple is where it will settle out, which is in the range of our target on normalized FY13E EPS (~$2.60).”
Shares of Best Buy (BBY) are down $2.04, or almost 15%, at $12.07, after the company this morning said it extended until February 28th an agreement reached in August�allowing founder Richard Schulze to complete a due diligence evaluation for a possible takeover of the company. The stock surged yesterday on speculation that a deal might be announced today.
Shares of Apple (AAPL) are down $16.94, over 3%, at $512.75, after UBS’s Steve Milunovich this morning reiterated a Buy rating but cut his price target to $700 from $780, after cutting his estimates for this fiscal year and next to reflect what he thinks are lower “build rates” for the iPhone, and some sources have told him that the iPhone 5 is not doing as well in China as the prior model, the iPhone 4S. He also thinks the new iPad mini is cannibalizing sales of the full-size model. Milunovich now models $187.2 billion in revenue and $47 in EPS this year, which is below the average $192 billion and $49.63 on the Street.
Speaking of Apple, Needham & Co.’s Charlie Wolf, who has a Buy rating on Apple shares and a $750 price target, today reflects on the arrival late Wednesday of the Google (GOOG) maps application on the iPhone, in the wake of Apple’s much-maligned mapping application. Wolf sees the Google app as a “mixed blessing”: “On the one hand, it should go a long way toward dampening the negative perception that the Apple Maps app engendered when iOS6 launched in September [�] At the same time, however, it could slow Apple�s efforts to create a competitive maps app on its own. That�s because users� input is critical in improving the quality of the application, and Apple will now receive less feedback on its own Maps app what with iPhone owners flocking to Google Maps.”
The weakness in Apple, in fact, has prompted some declines in stocks of companies serving Apple, including�Jabil Circuit�(JBL), down $1.12, or 6%, at $17.41, and�Qualcomm�(QCOM), off $2.98, or 5%, at $59.78.
Shares of Research in Motion (RIMM) are up 5 cents, or at $13.91 amidst a flurry of notes on the company this morning.
The company is set to report fiscal Q3 results next Thursday, and Anil Doradla with William Blair reiterates a Market Perform rating, writing that estimates may be too high for the quarter: “We estimate a fiscal third-quarter loss of $0.48 per share, $0.13 below consensus. Our revenue estimate of $2.5 billion implies a 12% sequential decline and a 52% year-over-year decline.”
Meantime, Bernstein Research’s Pierre Ferragu raised his price target to $12, while reiterating a Market Perform rating on the shares, writing that the Street is being too pessimistic about the company’s fiscal Q4 that ends in February, a quarter in which sales of the company’s new “BB10″ software, and accompanying handsets, should be getting underway.
Writes Ferragu, “Contrary to our initial forecast, we believe the launch of Blackberry 10 is ramping up positively [�] We believe 6.5m legacy units and 1.5m Blackberry 10 shipments would be possible, which, assuming $550 ASP and 30% gross margins for BB10 devices, would drive sales 10% above current expectations.”
At the seme time, Raymond James’s Tavis McCourt reiterated a Market Perform rating on RIMM, writing that “showing just a modicum of success might be enough to pique the interest of other players to partner or look more strategically at RIM in a world short on smartphone OS, in our opinion.”
And in case you missed it, The Wall Street Journal’s Will Connors this morning has a profile of the group of user interface designers known as the The Astonishing Tribe, whom RIM brought into the fold in 2010 to help make the look and feel of BB10. According to Connors’s piece, everything will be riding on the work they’ve done when BB10 comes out next year.
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