Here are some things going on this morning in your world of tech:
Shares of Apple (AAPL) are a solid gainer from the open in a down market, rising $5.73, or 1.3%, to $449.39, perhaps helped by the story this morning by Karl Baker and Adam Satariano of Bloomberg News saying the company is probably going to raise its dividend by 56%, to $4.14 per share, for a 3.7% current yield, according to a Bloomberg survey of six analysts. There is not time frame given, but Apple is described as “poised.”
Speaking of Apple, a report this morning from Moody’s Investors Service, this morning says that the company “could account for about $170 billion or 11% of total corporate cash” by the end of this year, up from 9.5% last year and 8% in 2011. Adds Moody’s, “Apple�s $137 billion is greater than the aggregate top five cash holders in 2008.”
Speaking of cash, Morgan Stanley’s Katy Huberty today raised her rating on shares of Hewlett-Packard (HPQ) to Overweight from Equal Weight, under a banner “cash is king.” Huberty, setting a $27 price target, writing that that CEO Meg Whitman has got “decision makers tasked to consider free cash flow implications rather than historical incentives target to revenue and EPS.” Huberty thinks lower cap ex this year and a “faster cash conversion cycle” could produce $3.45 per share in free cash flow, better by about $1 than what management has been forecasting.
Stifel Nicolaus’s Patrick Ho this morning writes that his review of foundry orders to Taiwan Semiconductor Manufacturing and others show orders on track based on expectations back in December. “Checks on the PC front remain very weak and if anything even below the lowered expectation entering the quarter,” though, he writes, but “despite the very weak environment, there are no changes to Intel�s (INTC) capex or WFE plans at this time (and we do not anticipate this changing).”
Shares of Verizon Communications (VZ) are up 38 cents, or 0.8%, at $48.40, after Citigroup‘s Michael Rollins raised his rating on the shares to Buy from Neutral, with a $54 target, suggesting a leveraged buyout by Verizon of its partner Vodafone‘s (VOD) 45% stake in their Verizon Wireless joint venture, now seems more likely than he’d previously estimated. That could produce “significant EPS and FCF accretion to Verizon in the first year under most of the scenarios we explored.”
HP shares are up 63 cents, or 2.8%, at $22.82.
And shares of Advanced Micro Devices (AMD) are down 2 cents, or 0.8%, at $2.58, despite an upgrade to Outperform this morning from Macquarie Equities Research’s Shawn Webster, who writes that despite numbers still coming down for the PC industry, AMD’s “roadmap and execution are stabilizing and the risk of share loss is becoming less, particularly in graphics chips, but also in microprocessors.”
“We estimate market share should be stable in both areas in the coming year.” He now sees $4.81 billion in revenue this year and a 26-cent-per-share loss, up from $4.57 billion and negative 36 cents per share.
Correction: A previous version of this post listed a 49% stake for
Vodafone in Verizon Wireless when in fact it is only 45%. My apologies for any confusion caused by the error.
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