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It's About Time Apple (AAPL) Price Targets Started Moving Higher

August 22, 2014 1:17 PM EDT
Get Alerts AAPL Hot Sheet
Price: $173.79 +0.04%

Rating Summary:
    40 Buy, 24 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 9 | New: 42
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With an anticipated iPhone refresh just weeks away and a stock at new all-time highs this week, just one thing has been lagging on Apple (Nasdaq: AAPL) - Wall Street research. While the Street is clearly bullish on the stock (56 Buy ratings versus 12 Sell or Neutral), price targets have not kept pace with the stock's recent appreciation. According to Ratings Insider, the average price target on Apple is now just $103.02 (targets updated during the last 12-months). This suggests just 1.6% upside to the current market price of $101.44. Current price targets don't justify the analysts' Buy ratings and as a result need to move higher.

While some analysts may wait until after the September 9 iPhone 6 revealing, we suspect a number of sell-siders are crunching the numbers as we speak and are getting ready to introduce higher price targets. StreetInsider.com predicts that the market will see no fewer than 5 price target hikes into the highly-anticipated event.

The average 2015 EPS estimate on Apple is $7.05. Meanwhile, the current S&P 500 market P/E multiple is 18.5x. An equivalent P/E multiple would generate a price target of around $130 for Apple. A more aggressive 20x multiple would generate a price target of $141. Therefore price targets between $130-$140 could easily be justified for the stock.

It's time for the Street to start playing catch-up.... on your mark, get set, go!



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