Katie MarsalCingular retail stores are already experiencing a slow down in sales of their high-end handsets ahead of iPhone, according to investment research firm PiperJaffray, which on Thursday raised its price target on shares of Apple to a new high of $140.
Munster's checks reveal a robust market for high-end handsets in the above-$300 range. For instance, he said Nokia's N95 model is selling extremely well in Europe for €450 (over $600 US), where Apple remains on track to launch iPhone later this year.
"Therefore, our checks suggest that demand for the iPhone will be high at launch and will continue to grow as Apple expands the product into international markets," the analyst wrote in a report summarizing Apple's stellar March quarter results, announced Wednesday.
According to his analysis, upside potential to Apple's per-share earnings have not yet peaked given that he believes the company is entering "what will be the 3 strongest quarters" in its history. In his note to clients, Munster said iPhone, mid-year product launches, and continued Mac market share gains will combine as catalysts for the expected growth.
"The more important point is that Apple has the pole position as it capitalizes in a shift in computer buying behavior," he wrote. "It is obvious consumers want computing devices that are focused on entertainment and creativity."
Thus far, Munster says his team of analysts have not run across any credible competitive threats to Apple's core markets. For instance, Microsoft's Zune, which was conceived to steal share from the iPod, "is a flop." Similar, Dell and HP have failed to deliver PCs that rival the Mac," he said.
PiperJaffray remains confident that over the next several quarters Apple will hold its massive lead in portable audio and grow share in the personal computer market.
"We believe Apple's performance is sustainable for 3 reasons," Munster wrote. "1) we expect gross margin to stabilize above 30 percent in [the second half of the year] due to favorable component pricing and level product pricing; 2) Apple is entering three of its strongest product cycles ever with the iPhone, Apple TV and Leopard; 3) Apple continues to innovate and we do not expect the pace of innovation to slow."
For these reasons and others, the analyst raised his price target on shares of the Cupertino-based company to $140, up from $123.
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39 Comments
First!
This is great news. My dad is planning on putting 5000 (his savings) into Apple Stock.
I heard recently that the stock market is like sex in high school. Nobody knows anything about it, but everybody talks about it like they're experts.
So, just to make sure that I'm clear here. If you have 5000 in Apple, bought at 100. It goes up to 200. You now have 10,000 dollars?
Also, if have 5000 bought at 100, that means you have 50 shares. So if the stock splits, and its at 50 dollars, you now have 100 shares?
First!
This is great news. My dad is planning on putting 5000 (his savings) into Apple Stock.
I heard recently that the stock market is like sex in high school. Nobody knows anything about it, but everybody talks about it like they're experts.
So, just to make sure that I'm clear here. If you have 5000 in Apple, bought at 100. It goes up to 200. You now have 10,000 dollars?
Also, if have 5000 bought at 100, that means you have 500 shares. So if the stock splits, and its at 50 dollars, you now have 1000 shares?
Correct, but if Steve Jobs gets into a car accident and dies on his way home from work today, you won't have $5,000, you'll have $50...that's the market for ya! I have 20 or so shares from when I used to work for Apple, and it's nice just to be able to say I'm a shareholder.
Correct, but if Steve Jobs gets into a car accident and dies on his way home from work today, you won't have $5,000, you'll have $50...that's the market for ya! I have 20 or so shares from when I used to work for Apple, and it's nice just to be able to say I'm a shareholder.
Agreed, that's the most unstable thing about owning Apple stock. I'm sure that with Jobs gone the stock would take a major hit. But I think if you stay in the boat and weather the storm, the people at Apple have the ability to move on without Jobs. I mean, you still have enormous talent working there, like Jonathan Ive.
First!
This is great news. My dad is planning on putting 5000 (his savings) into Apple Stock.
I heard recently that the stock market is like sex in high school. Nobody knows anything about it, but everybody talks about it like they're experts.
So, just to make sure that I'm clear here. If you have 5000 in Apple, bought at 100. It goes up to 200. You now have 10,000 dollars?
Also, if have 5000 bought at 100, that means you have 500 shares. So if the stock splits, and its at 50 dollars, you now have 1000 shares?
If you buy 500 Apple Stock at $100, and it goes up to $200, you now have stock that would be worth $10,000 if you can get someone to buy it at that price. Normally, that's easy, but if everyone decides to sell on the same day, the price will drop.
The key to stock is buying it at a low price, and then selling it off at its peaks. For example, if you would have bought stock last week at $90, and sold it off today at $100, you would have made about $500. Now, if the stock keeps climbing, it would have been bad to sell, but if it drops again, you re-buy right before you know it's going to spike up.
Unfortunately, you never really know what's going to happen.
First!
This is great news. My dad is planning on putting 5000 (his savings) into Apple Stock.
I heard recently that the stock market is like sex in high school. Nobody knows anything about it, but everybody talks about it like they're experts.
So, just to make sure that I'm clear here. If you have 5000 in Apple, bought at 100. It goes up to 200. You now have 10,000 dollars?
Also, if have 5000 bought at 100, that means you have 500 shares. So if the stock splits, and its at 50 dollars, you now have 1000 shares?
Your math is off. $5000 at $100/share would buy 50 shares not 500. But the concept is correct. But the profit is on paper only unless you sell it. I bought Apple at $26/share about 7 years ago. It has since split once, so my actual per share cost was about $13 and I now have twice as many shares as my original purchase amount. Now of course I wish I had bought a lot more.
Of course I have also bought a lot of other stock that has since lost as much as 90% of its value. Investing everything one has in one place is not a very good investment strategy.
Mark