Evercore raises Apple price target to $750 on new dividend, iPad momentum
Apple's stock hit a new milestone on Monday when it closed past the $600 mark. The surge came after Apple announced earlier in the day that it was initiating a dividend of $2.65 per share and a share repurchase program.
The Cupertino, Calif., company also revealed the good news on Monday that sales of the new iPad during its recent launch weekend topped 3 million. Executives have indicated that they are "thrilled" with the record weekend.
In a note to investors, Cihra called the 1.8 percent yield "modest," while predicting that it will "help broaden" Apple's investor base. He characterized the company's share repurchase program as "long overdue." The analyst viewed the announcements as meaningful because Apple "at least broke the seal."
"Even factoring in the new dividend and small buybacks, we model Apple exiting CY13 with net cash approaching $180B or $190/share, leaving room for todayâs initial payout metrics to expand," he said.
Cihra, a five-star rated analyst according to Starmine, raised his estimate for first quarter calendar 2012 iPhone sales from 30 million to 32 million units. He also lift his iPad estimate from 10 million to 13 million on "strong initial uptake."
The investment bank advisory firm pointed to an "upside in momentum out of the gates" as the reason for the increase in its iPad estimate. For calendar 2012, Evercore now expects sales of 66 million, up from 59 million.
Cihra added that he continues to "see prospects for a unique mid-cycle iPad refresh" coming around September. The update could bring the introduction of a quad-core A6 processor and a "new smaller 8-inch model," he wrote.
The firm reiterated its Overweight and Top Pick ratings for Apple and raised its price target to $750 from $650.
28 Comments
I'll be THAT guy again here.
Despite what Apple may claim on their earnings call, I sense that the timing of this dividend announcement to be somewhat unusual.
Normally, dividends are announced to keep the stock price's momentum. Perhaps Apple was seeing the looming lawsuits (majority of which have not had any impact) and the increased competition from competitors as an ominous sign about the future. Hence, the dividend and share buyback announcement.
Just my 0.02 cents.
I threw the bait. Hope I get a big fishy today.
Full disclosure: I'm an AAPL shareholder.
I would like to commend the writer Josh Ong for actually mentioning Cihra's StarMine rating.
Too often, we see AI (and other tech media sites) mindlessly quoting analysts without mentioning overall track records. Several popularly-quoted analysts that are not star-rated include: Gene Munster (Piper Jaffray), Shaw Wu (Agee), Katy Huberty (Morgan Stanley). You can basically chuck their analyses into the circular file.
$750 over the next 12 months? I'm thinking a 25% gain over a year is excessively conservative unless qualified with some data that explains a major drop in the market overall or in Apple's ability to maintain sales.
PS: Galbi is admitting he's just baiting posters to derail the thread. What does it take to send tachy to purgatory?
Wish Steve was alive to see these numbers.
The target prices are again pulling away from the current stock price. As soon as Apple gets within range, it seems the targets are raised another $100 or so. If Apple even reaches $650 this year, I'll still be very happy. Long since 2004.
I also wish Steve were around to see how well his company was doing. He did such a wonderful job for the company and almost singlehandedly changed the cellphone and computer industries. I kept hoping he was going to live longer, but it just wasn't meant to be.