Neil Hughes
Investment firm J.P. Morgan became the latest to increase its price target for Apple stock on Tuesday, projecting that the company will be propelled to $108 per share thanks in part to this year's anticipated "iPhone 6" launch.
"iPhone 6" and "iPhone 6c" concepts by Martin Hajek.
Analyst Rod Hall issued a new note to investors, a copy of which was provided to AppleInsider, to lay the case that shares of AAPL are likely to see earnings grow beyond current expectations on Wall Street. Hall anticipates that Apple has multiple new product launches in the works for late 2014, including a redesigned iPhone.
Hall's estimate is up from his previous target of $89, which has been underwater for some time. His new price target of $108 calls for Apple to reach that goal by the end of 2015.
In addition to a redesigned iPhone, Hall also expects that Apple will launch a so-called "iWatch" this fall. However, he doesn't believe that new product category would have a significant effect on the company's bottom line.
J.P. Morgan was the second investment firm to raise its price target on Apple on Tuesday, joining Needham & Company, which increased its forecast to $97. In that increase, analyst Charlie Wolf also cited an expectation that "iPhone 6" sales will be strong, but he was also impressed by the announcement of Apple's new programming language, dubbed Swift, at this month's Worldwide Developers Conference.
Other firms tracked by AppleInsider that revised their price targets upward earlier this month are Cowen & Company ($102), and RBC Capital Markets ($100). Many have been prompted to increase their targets in the face of strong gains by AAPL stock since the company's successful March quarter results, in which iPhone sales came in higher than market expectations.
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20 Comments
$108 doesn't seem out of order. After all $110, which is equivalent to pre-split $770, is the new $705. The $705 high water mark from Sept 2012 was against 945 million shares, giving Apple a market cap of $660 billion. For Apple to hit that high again, the stock, now with 861 million shares outstanding, would have to get to a pre-split $770, or $110 post-split. That would require only a 16.5 PE against $40 billion in trailing earnings, which is right about where Apple's fiscal 2014 earnings will lie come the end of September. So $110 is a no-brainier over the next three months. Building upon this will be the huge positive news cycle associated with the iPhone 6, which will take away the last advantage the Android vendors can claim, leaving them behind on security, OS and App Store fragmentation, hardware quality and industrial design, and lacking a worldwide network of high-end outlets to match the attraction of the Apple stores. Not to mention lagging in technology compared with Aaple advances such as 64-bit handsets, TouchID, programming language and development environment, and more. Apple at an 18 PE against $40 billion in trailing earnings with 850 million pre-split shares (about 6 billion post-split shares) come September/October results in a stock price of $121 per share. That does not seem out of bounds in my view.
I am happy to read their sentiment about Apple, and the likelihood of new products. But I have total and utter disregard for their predicted stock price and timing of such price. For far too long I have watched these analysts follow the market price up, then down, and ending up way out of line, normally behind by 7 to 10 months. I believe it is reasonable to predict 125 - 130 by the spring of '15.
I dont agree with them on their price target, it's too low.
But I do agree with them on one thing, the new iPhones will exceed expectations.
I also think the iPhone 6 will be very successful.
It's anecdotal, but I've seen a lot people switching to Android solely for the bigger screen (they don't care much about the "openness" and other Android exclusive features).
Another thing I've heard a lot is that "iPhones are easy to break", pointing out to the glass back on their 4/4S or the glass inlays on the 5/5S (which some people think exist only to make the iPhone more breakable, they don't know about radio transparency and antennas).
The iPhone 6 looks like it will have a completely metallic back (except for the antenna bands) and the half pipe shape around the sides of the back shell will make it structurally strong and much harder to bend. The plastic antenna bands may also act as shock absorbers as they are positioned on the corners of the device.
So I think that a bigger screen and better durability will be huge selling points for a non-negligable part of the market which would've otherwise switched to another platform, much more than the little details that people here are bickering about. These sales will add up to the sales of people who were going to buy an iPhone this year anyway.
Why are all of these "notes" being released today? Looks an awful lot like collusion or stock manipulation to me (just my opinion). How does it look to the man-on-the-street investor?