Buy Apple (AAPL) Here and Get Mac, Software, iTunes, and iPod Biz for Free - Needham
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Price: $305.59 -0.11%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Needham & Company raised its price target on Apple (NASDAQ: AAPL) today from $450 to $540, while maintaining a Buy rating.
Analyst Charlie Wolf notes, "In contrast with our February exercise where the iPhone accounted for 66.0% of the upward revision of our price target from $375 to $450, the iPhone contributed only 28.6% to the increase in the current update. The iPhone's value increased just 10.7%. The iPad’s value increased 51.6% chiefly because we assumed the device would capture a materially higher share of the tablet market than we previously forecast. The Mac’s value increased 31.0% because of a revision in the Mac model, where we substituted the halo effect emanating from the iPad for the one emanating from the iPod. ITunes recorded the largest percentage increase in value - 82.3% - because we changed the model to capture the explosive growth in iOS applications sales. Finally, Apple’s cash hoard increased 27.2% since our previous exercise."
Here is how he lays out the value of each Apple part to get to his $540 price target:
Based on the above analysis of Apple's parts, investors will see that the value being placed on just iPhone, iPad and cash is $411.45/share, or 10% above the current market price of $375. This means you are getting Mac, software, iTunes, and iPod for free.
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $377.37 yesterday.
Analyst Charlie Wolf notes, "In contrast with our February exercise where the iPhone accounted for 66.0% of the upward revision of our price target from $375 to $450, the iPhone contributed only 28.6% to the increase in the current update. The iPhone's value increased just 10.7%. The iPad’s value increased 51.6% chiefly because we assumed the device would capture a materially higher share of the tablet market than we previously forecast. The Mac’s value increased 31.0% because of a revision in the Mac model, where we substituted the halo effect emanating from the iPad for the one emanating from the iPod. ITunes recorded the largest percentage increase in value - 82.3% - because we changed the model to capture the explosive growth in iOS applications sales. Finally, Apple’s cash hoard increased 27.2% since our previous exercise."
Here is how he lays out the value of each Apple part to get to his $540 price target:
- Macs = $63.92, up 31%
- Software and peripherals = $33.41, up 3.5%
- iTunes (including iPhone App Store) = $27.52, up 82.3%
- iPod = $3.50, down 37.1%
- iPhone = $265.86, up 10.7%
- iPad = $65.62, up 51.6%
- Excess cash = $79.97, up 27.2%
- Fudge factor = $0.21
Based on the above analysis of Apple's parts, investors will see that the value being placed on just iPhone, iPad and cash is $411.45/share, or 10% above the current market price of $375. This means you are getting Mac, software, iTunes, and iPod for free.
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $377.37 yesterday.
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