Barclays Capital’s Ben Reitzes this afternoon reiterated an Overweight rating on shares of Apple (AAPL) and a $555 price target, while reiterating his estimates for last quarter and the current quarter, warning that Apple’s fiscal Q2 outlook for March will likely employ the typical Apple “conservatism,” if not more.
Reitzes is estimating $9.66 in EPS for fiscal Q1 that ended last month, on $38.95 billion in revenue. For Q2, he’s modeling $7.83 per share on revenue of $32.06 billion.
The Street is currently modeling $9.81 per share on $38.3 billion in revenue in Q1 and $7.86 per share on revenue of $31.62 billion in Q2.
That would be an 18% decline, quarter-to-quarter, writes Reitzes. However, Apple has typically forecast Q2 revenue to decline from Q1′s level by 27%, on average, writing, “we wouldn�t be surprised to see Apple guide several hundred percentage points below this q/q forecast given its normal practice of conservative guidance.”
But he also sees some factors dampening the forecast:
Apple may sound more caution around the March quarter given the lack of an extra week, the aging of the iPhone 4S product cycle, an expected iPad product transition and pressures from a weak Euro. With regard to margins, we expect Apple to guide gross margins flat to down q/q given potential for iPad price declines with a new product introduction in the March/April timeframe. For several quarters we have been calling that Apple may keep the iPad 2 in its line up at lower prices, while introducing a higher cost HD version. Last year, Apple guided for a 38.5% gross margin in F2Q11, which was flat q/q, but had guided gross margin for its F2Q down q/q in the two prior years.
Reitzes argues any “concerns around March quarter guidance will be short-lived” given so many potential positives in calendar 2012.”
Apple shares today are up $2.57, or 0.6%, at $413.79.
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