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Apple Makes Goldman's 'Recommended' List, Lifting Shares 12%

April 28, 1999|Bloomberg News, Times Staff

Apple Computer got a big vote of confidence Tuesday from Goldman Sachs & Co. as the brokerage added the stock to its "recommended" list.

The news sent the shares up $4.81, or 12%, to $45.75, the highest since Jan. 13.

Apple's shares have rocketed 35% just since April 19, quickly recovering from the setback that hit many major personal computer makers in previous weeks amid worries about sales.

On Tuesday, Goldman analyst Richard Schutte told clients in a report that new products, including notebook computers, should help boost Apple's sales as it enters its strongest time of the year.

Apple interim Chief Executive Steve Jobs has rejuvenated the company, helping turn around two years of losses, streamlining product lines and bringing new designs to market.

On April 14, Apple reported quarterly earnings up a surprising 69% from a year earlier as the company benefited from new products such as its iMac computers.

The iMac, the top personal computer sold in stores for several months, boosted Apple's share of the home PC market to 7% in January from 2% before the curvy, colorful machine's Aug. 15 debut.

Apple will introduce a new consumer portable PC, which it has lacked for more than a year, in the next few months. There has been much speculation about the product, and many expect it to weigh less than 5 pounds and have a clamshell design, with curves reminiscent of the iMac.

Apple also is set to kick off its Worldwide Developers Conference in San Jose on May 10, and the semiannual MacWorld show in New York in July. Schutte said in his report that he expects positive announcements and feedback at these events.

Apple also may start using some of its $2.8 billion in cash for stock buybacks, which would help boost the share price, Schutte said.

The stock's price now is 17 times analysts' consensus estimate of $2.75 a share for Apple's earnings in the fiscal year ending in September. But at least so far, many analysts don't see significant earnings growth for the company in the following year.


Apple's Comeback

How shares of the computer maker have traded in recent years (quarterly closes and latest on Nasdaq):

Tuesday: $45.75

Source: Bloomberg News

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