Perma-Bull on Apple (AAPL) Cuts Price Target to $235
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Analysts at Piper Jaffray, including Gene Munster, cut estimates on Apple (Nasdaq: AAPL) this morning, but kept the stock rated at Buy and also kept it on its Alpha List. As a result of the lower estimates, Piper moved its price target on Apple from $250 to $235.
$235...? Seriously? With shares of Apple trading under $94 today (down 2% from yesterday's close), that would be a 12-month return of more than 150%. To add a little perspective, if Apple is trading around Piper's price target at this time next year, and keeps its shares outstanding at 888.9 million, the company would have a market cap of nearly $210 billion.
But anyways... back to the Piper report.
The firm lowered its FY09 and FY10 EPS estimates on Apple from $5.67 and $7.98 to $5.46 to $7.73. The Street estimates are currently for FY09 EPS of $5.28 and for FY10 EPS of $6.54. Piper cited "low visibility into CY09" and said it was taking "a cautious approach to PC and Mac sales next year." As the firm sees overall PC sales only growing about 5% year-over-year in '09, Piper cut its growth estimate for Mac sales from 16% to 10%. As for Apple's other two major product lines next year, Piper lowered its iPod sales estimate from down 7% to down 20% but left its iPhone estimate unchanged at 45 million units.
Notably, Piper cut estimates on its entire Internet and Online Content universe earlier, citing an economic and consumer spending outlook which has "deteriorated significantly over the last month..." The firm said its consumer spending outlook is based on drivers such as "employment, average employee earnings, consumer credit, total household wealth, inflation on necessities such as food and energy, and consumers' preferences for spending vs. saving."
Apple, Inc. designs, manufactures, and sells personal computers, portable digital music players, and mobile communication devices, as well as related software, services, peripherals, and networking solutions worldwide.
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yes
This makes sense. We have been in a recession for 12 months remember? During which Apple has blown away figures. When we exit said recession it will be off to the races. Most recessions last 18 months and no one knows when they end until we look back, so we could exit this in 6 months. During that time Apple will still out sell the industry.
AAPL Price Target
I have no opinion regarding what price AAPL will reach in 2009, but I suggest that you suspend your incredulous attitude toward it performing very well for the following reason. The revenue generated by iPhone is recognized over 2 years, thus once Apple reaches the point where it has sold iPhone for 2 years (ie June 2009) the revenue and profit will really start to ramp significantly. Many analysts do not understand this simple concept. Please be smarter that they are.
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yes
Chad on Dec 4, 2008 12:38 PMThis makes sense. We have been in a recession for 12 months remember? During which Apple has blown away figures. When we exit said recession it will be off to the races. Most recessions last 18 months and no one knows when they end until we look back, so we could exit this in 6 months. During that time Apple will still out sell the industry.