A new analyst’s report has bumped previous targets for AAPL shares with the prime reason being the might of the iPhone. Although the growth of Mac sales was also cited for the price bump, it was mainly down to the sheer momentum of the Apple iPhone 4S plus expected further growth from the iPhone 5 when it is released.
Ben Reitzes, analyst for Barclays Capital, has raised his 12-month price target to $710 per share from $630 per share, up 13% and foresees that Apple might yet see earnings per share of $75 as a $300 billion per year company. A few days ago we told how Apple shares had hit a 52-week high and this further news will no doubt be music to the ears for those who’ve invested in the company. Reitzes explained that there were still further profits to be made by Apple from the PC and mobile phone market
Reitzes said in his report, “Our research points toward solid momentum for the iPhone 4S through the calendar first quarter. Sales seem to be benefiting from international rollouts, pent-up demand and overall excitement around the unmatched Apple ecosystem (apps, iCloud, Siri, iOS, etc.),” as reported by the Mac Observer. Although neither iOS 6 or the iPhone 5 have yet been made official by Apple, Reitzes included those as factors to be considered for further growth. The vast potential of the smartphone market in China was also noted as a growth area by Reitzes and we previously told how China Telecom had now been added as an iPhone 4S carrier there.
Reitzes’s suggestion that Apple could become a $300 billion per year company is interesting at a time when many are wondering about how much further Apple could grow. Talking of ‘the law of large numbers’ Reitzes attempted to determine how much growth there could be in the next three to five years. He pointed out “We believe that Apple’s current P:E of 11.5x FY13 actually understates future growth since its market share is immature in its top 3 growth segments.” The conclusion was an EPS possibility of $75 by the end of 2015 and this was without the factor of Apple TV sets being taken into account, which could possibly increase earnings per share by an additional $5. You may also be interested in this article that discusses Apple stock and the idea of investing for retirement. It makes some very valid points and again touches on the laws of economics dictating how successful a company can eventually become, yet wonders if Apple can be the company to defy those laws.
At the end of yesterday (Tuesday) Apple stock ended at $530.26, down $2.90. Its market capitalization was $494.4 billion. With the iPad 3 announcement due later today it’s pretty likely that we’ll see that figure rise by the end of today’s trading. What are your thoughts on these new increased price target figures and the possibility that Apple may become a $300 billion per year company? We’d like to hear your comments on this.