Goldman Sachs Raises Apple & Microsoft Estimates (AAPL, MSFT)

Goldman Sachs is raising estimates on both Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) today:

On Microsoft (MSFT), Goldman Sachs has noted how the company "kicked itself out of the doldrums and outperformed" with an 11% gain (vs. -4% at S&P 500).  Even after the lift Goldman Sachs sees MSFT attractive with a BUY RATING due to product cycle upgrades, broad international exposure, and an above expectations PC Unit Growth.  Goldman Sachs raised Q2 and Fiscal 2008to match the hardware team’s raising of PC growth forecasts in calendar 2008.  Firm also notes strong holiday season in EDD division with better than expected console sales and a strong currency beneficiary.  If you will recall, the last time we noted a key upgrade on Microsoft from Goldman Sachs shortly before earnings we thought that the brokerage analyst had learned something not widely known because of the timing of the call.

Goldman Sachs has raised estimates on Apple (AAPL) this morning and maintained its BUY RATING.  This fiscal year at Apple is being raised to $5.03 EPS from $4.88 (consensus for Fiscal 9/08 is $5.07) and next fiscal year is being raised to $6.25 EPS vs. $5.71 (consensus for Fiscal 9/09 is $6.36).  So when you compare the Goldman Sachs estimate raise it is still under that of Wall Street.  This appears to be more of a catching-up call than anything groundbreaking.

Jon C. Ogg
January 4, 2008