Piper Sees '09 E-Commerce Down Due to Increased Saving

by: Eric Savitz December 04, 2008 | about stocks: AAPL / ADBE / BIDU / DLB / GOOG / NFLX / VCLK / YHOO    

Eric Savitz

From Barron’s:
Introducing Barron’s Daily Stock Alert: Try it FREE for 30 days
Subscribe to Barron’s Online
Visit Barron’s New Market Data Center
Become a Contributor Submit an Article
  • Font Size:
  • Print

While I noted earlier his reduced estimates for both Apple (AAPL) and Google (GOOG), Piper Jaffray’s Gene Munster Thursday actually cut estimates on 33 Internet and online content companies, citing “the significant deterioration in the economic and consumer spending outlook.”

Munster says he expects the U.S. savings rate to increase significantly over the next few years, following 25 years of increasing leverage and a declining savings rate. The good news is that will allow households to rebuild savings, home equity and investment portfolios. The bad news is that it means less consumer spending.

“Nearly all drivers of consumer spending, including employment, employee earnings, consumer credit, household wealth and consumers’ propensity to save, are all moving in a direction to drive spending lower over the near-term,” he writes in a note.

Munster now sees non-travel e-commerce spending down 10% in 2009; he expects total online advertising to increase just 2% in 2009. He expects all segments to shrink in 2009 from 2008, but with growth in 2010. He cut estimate on the online media and search companies by 13-16%. For online content companies, he cut estimates by 10%-15%.

Munster singles out the China online advertising market for special attention: he cut numbers for the China Internet stocks by an average 15%. Munster says China’s 2009 GDP could be closer to 4% than the government’s estimate of 9.5%.

He also says that search advertising should fare much better than display, and asserts that that online display ad revenue in aggregate could be down 10%-12% next year; he notes that Yahoo (YHOO) and ValueClick (VCLK) are particularly vulnerable here.

Munster writes that his top picks remain Apple, Adobe (ADBE), Baidu (BIDU), Dolby Labs (DLB), Google and Netflix (NFLX).

Companies affected by Piper’s cuts today: Adobe, Amazon, Apple, Avid, Baidu, China Digital TV, Corel, Ctrip, DTS, Dolby, Digital River, Expedia, Focus Media, GSI Commerce, Google, IAC/Interactive, Kongzhong, Macrovision, Marchex, Limelight, Netflix, Orbitz, Parametric, Priceline, Real Networks, Sina, Shutterfly, Sohu, U.S. Auto Parts Network, ValueClick, Web.com, Yahoo and eBay.

Related Articles

This article has 1 comment:

  •  
    Dec 05 10:58 AM
    i think we'll see people rationalizing about buying presents this holiday season and that will let them continue to buy the tech toys. but there's another factor... in scary times, people need to feel like they're in touch with loved ones. we'll see more smartphone purchases than one would expect in bad economic times. Apple will do especially well in their retail space, compared to almost anyone else. i keep an eye on the king of prussia store, in PA, and that continues to do a robust business. if you're in there awhile, it's just amazing to realize how many 'newbies' come through the door...and then walk out with a product...often the 'enticer', an ipod shuffle or nano...but only after drooling over an iphone or Mac. Those stores offer such a high level of emotional and intellectual satisfaction and support...if other hi-tech places did this, they woudln't be in chapter 11....circuit city could use a few lessons.
    Reply | Link to Comment
More Comments on AAPL »
Top Rated Comment Streams:

Numbers are net rating-

See all Top 100 »
More by Eric Savitz

Investment Resources
Money Management
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
e-Commerce
Internet Advertising
e-Finance
Internet Content/Community