Needham sees Apple stock hitting $540 on sales of 54M iPads in 2012

Posted:
in AAPL Investors edited January 2014
Investment firm Needham & Company on Friday upped its price target for Apple stock to $540, with projected sales of 54 million iPads and 108 million iPhones in 2012.



Analyst Charlie Wolf provides semi-annual updates on his AAPL 12-month price target. Friday, he increased that projection from $450, originally set in February, to $540, but for different reasons than price target raises in the past.



In Wolf's latest projection, the iPhone only contributed modestly to his increased price target. Instead, he has increased his models for Mac and iTunes revenue.



Wolf breaks down Apple's projected value per share with a dollar amount assigned to each of the company's major product categories. In the latest numbers, iTunes saw the largest percentage increase in value, up 82.3 percent, to represent what he called "explosive growth in iOS applications sales."



In addition, he expects the iPad to capture a larger share of the tablet market going forward than was previously anticipated. In Wolf's model, the iPad accounts for 12.2 percent, or $65.62, of the $540 price target.



This year, Wolf sees total iPad shipments of 35.6 million units, up 137.4 percent year over year. In 2012, he anticipates Apple's tablet will grow another 52.5 percent, to 54.3 million units shipped.



"The increase in our price target is not an exercise in 'keeping up with the Jones,'" he wrote. "There's no rule that says our price target always has to rise. Indeed, it could fall if Apple's semi-annual performance trailed our forecast.



"Of course, in Apple's case it has not done so since the emergence of the iPod, which was followed by the iPhone, iPad and the Apple Stores."







The iPhone still represents the lion's share of Apple's stock value, in Wolf's eyes, though he has reduced its percentage share to less than half. Previously, the iPhone accounted for 53.4 percent of the stock's projected value; now it's estimated at 49.2 percent, or $265.86 of the $540 price target.



Total iPhone shipments are projected to hit 77.3 million units in 2011, with Apple capturing 19 percent of the smartphone market. In 2012, Wolf sees Apple's share growing to 20 percent, with sales of 108.1 million iPhones.



"Since the iPhone represents almost half of Apple's value, even a modest shortfall in the iPhone's growth would have an outsized impact on the company's fair value," the analyst cautioned. "We are more comfortable with our iPad valuation. However, the tablet market is still so young that the trajectory of iPad sales could turn on a dime."



In June, Needham predicted that Apple would ship 30 million iPads, along with 17 million Macs, in 2011. He also predicted that the iPhone will continue to win back market share from Google's Android platform in the U.S. smartphone market.
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Comments

  • Reply 1 of 41
    MacProMacPro Posts: 19,718member
    540? I'll take that.
  • Reply 2 of 41
    Quote:
    Originally Posted by digitalclips View Post


    540? I'll take that.



    Than buy some puts. And sell some calls.



    But keep in mind that these analysts are always wrong, and they are just manipulating the stock price for their own selfish gains.
  • Reply 3 of 41
    cloudgazercloudgazer Posts: 2,161member
    Those iPad numbers are still very conservative. Next quarter numbers will be up again, around 15mil units. 2012 will be over 60mil, probably around 80mil.
  • Reply 4 of 41
    scotty321scotty321 Posts: 313member
    With the U.S. economy weak and falling, with the U.S. dollar crumbling, and with the halt of most economic growth worldwide, I think it is pretty much IMPOSSIBLE that Apple stock will EVER be trading at $540 a share. I would say the chances of that happening are ZERO. Some reality from these analysts would be much appreciated. Two books that I've recently read, "Aftershock" and "The End of Growth", accurately lay out how the financial party days are over for ALL investors.
  • Reply 5 of 41
    Quote:
    Originally Posted by scotty321 View Post


    Two books that I've recently read, "Aftershock" and "The End of Growth", accurately lay out how the financial party days are over for ALL investors.



    Over the decades books like that have sold consistently well, despite being consistently wrong.



    How can you conclude that these two are accurate WRT the future?
  • Reply 6 of 41
    Quote:
    Originally Posted by scotty321 View Post


    With the U.S. economy weak and falling, with the U.S. dollar crumbling, and with the halt of most economic growth worldwide, I think it is pretty much IMPOSSIBLE that Apple stock will EVER be trading at $540 a share. I would say the chances of that happening are ZERO. Some reality from these analysts would be much appreciated. Two books that I've recently read, "Aftershock" and "The End of Growth", accurately lay out how the financial party days are over for ALL investors.



    Well... at least the jobs report this morning was better than expected...



    In January Apple will announce its 1st quarter results... at that point AAPL will firmly establish itself above $400.



    $540? That does sound like a pipe dream in this economy.
  • Reply 7 of 41
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by scotty321 View Post


    With the U.S. economy weak and falling, with the U.S. dollar crumbling, and with the halt of most economic growth worldwide, I think it is pretty much IMPOSSIBLE that Apple stock will EVER be trading at $540 a share. I would say the chances of that happening are ZERO. Some reality from these analysts would be much appreciated. Two books that I've recently read, "Aftershock" and "The End of Growth", accurately lay out how the financial party days are over for ALL investors.



    Now you're being silly. In fact the weaker the dollar gets the higher Apple stock will go, since most of their income is non dollar, weaker dollar means more profits.
  • Reply 8 of 41
    matrix07matrix07 Posts: 1,993member
    If economy permit, $500 next year is conservative forecast.
  • Reply 9 of 41
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by scotty321 View Post


    With the U.S. economy weak and falling, with the U.S. dollar crumbling, and with the halt of most economic growth worldwide, I think it is pretty much IMPOSSIBLE that Apple stock will EVER be trading at $540 a share.



    I agree that it won't hit $540, maybe not even $500 but I disagree with the reason being the economy.



    I think that Apple could look to splitting the stock every soon. They don't do it often but they do it. And if the price goes back up to $400 and stays over it for a few weeks this could be another time.
  • Reply 10 of 41
    I love it when people use words like "impossible" and "never" to describe what something "can't " do. If an analyst had said back in 1997/1998 that Apple would someday be the 2nd largest company in the world based on their stock price they would have IMMEDIATELY carted them off to the looney bin.



    Is it possible the Apple stock could hit $540? Sure. Is it possible that Apple has hit their peak and will see a steady decline back down to earth? Yup. The latter part is much more certain than the former as what goes up eventually does come down. After all - look at Microsoft. For a period of time there in the 90's and early 2000's they appeared to be an unstoppable force. Well, one seriously crappy OS (Vista) and some other really bonehead market moves (or non-moves) and they have settled down into a steady company without much movement, or creativity in the market.



    Part of the issue with Apple right now is they have cornered so much of the market that their continued rise is all but certain. Watch the other reports of competing vendors struggling to get parts and raw materials necessary to make a product that might be a contender against Apple's product line. The reports continue to come in that the competitors are just not able to get what they need because Apple has locked them up already. That's what a very large market cap can do for you.



    The ONLY way that Apple is going to get beat now is if they either stumble with a poor primary product release (OSX, Mac line, iPod/iPad/iPhone), or someone out-innovates them. Again - I don't see that happening in the foreseeable future. Can it happen? Yup. Never? Nope.
  • Reply 11 of 41
    I've been buying AAPL since the early 1990's, having now accumulated 5700 shares. The equity has split 2 for 1 twice in that time, making my average price per share $12.40. Right now (9:20 MDT), the stock is sitting at $375, give or take a few pennies--and has been as high as the low 400's.



    Now, and with that said, oh wise Scotty321 . . . what would you have said AAPL's chances of rising from 12 to 400 would have been in the past two decades? Zero? Less than zero? Apple, Inc. will be the largest cap company in the world before the end of the year (if not the end of the month), a fact I doubt you will acknowledge now or even have predicted THEN.



    As my daddy used to say to my brother and me, "If you're so smart, how come you ain't rich?" ARE YOU, Scotty? (If so, I'd love to invite you onto my yacht sometime for cocktails. You can predict the future some more for us, one and all!)
  • Reply 12 of 41
    Quote:
    Originally Posted by charlituna View Post


    I agree that it won't hit $540, maybe not even $500 but I disagree with the reason being the economy.



    I think that Apple could look to splitting the stock every soon. They don't do it often but they do it. And if the price goes back up to $400 and stays over it for a few weeks this could be another time.



    Why would Apple need to split their stock? Stocks get split so they can continue to raise capital to invest with. How much did Apple have in the bank last? $75 Billion? A split would be incredibly unlikely.
  • Reply 13 of 41
    Quote:
    Originally Posted by VinitaBoy View Post


    I've been buying AAPL since the early 1990's, having now accumulated 5700 shares. The equity has split 2 for 1 twice in that time, making my average price per share $12.40. Right now (9:20 MDT), the stock is sitting at $375, give or take a few pennies--and has been as high as the low 400's.



    Now, and with that said, oh wise Scotty321 . . . what would you have said AAPL's chances of rising from 12 to 400 would have been in the past two decades? Zero? Less than zero? Apple, Inc. will be the largest cap company in the world before the end of the year (if not the end of the month), a fact I doubt you will acknowledge now or even have predicted THEN.



    As my daddy used to say to my brother and me, "If you're so smart, how come you ain't rich?" ARE YOU, Scotty? (If so, I'd love to invite you onto my yacht sometime for cocktails. You can predict the future some more for us, one and all!)



    Although I agree with the 2nd paragraph I have to say that the old saw in the 3rd paragraph, "If you're so smart, how come you ain't rich?", is such a crock of shit that it really grinds me. Wealth and intelligence don't necessarily go hand in hand... just as wealth and hard work are also not necessarily a match. Wealth and luck are a much better match (although some people have become wealthy by using intelligence and hard work).



    jmho
  • Reply 14 of 41
    Quote:
    Originally Posted by island hermit View Post


    Although I agree with the 2nd paragraph I have to say that the old saw in the 3rd paragraph, "If you're so smart, how come you ain't rich?", is such a crock of shit that it really grinds me. Wealth and intelligence don't necessarily go hand in hand... just as wealth and hard work are also not necessarily a match. Wealth and luck are a much better match (although some people have become wealthy by using intelligence and hard work).



    jmho



    Ah yes. Apple isn't smart, just lucky. That makes perfect sense.
  • Reply 15 of 41
    Quote:
    Originally Posted by sessamoid View Post


    Ah yes. Apple isn't smart, just lucky. That makes perfect sense.



    Hey, smartass, why don't you read the whole fucking comment before rolling your eyes... and we're talking about people, not companies...
  • Reply 16 of 41
    Quote:
    Originally Posted by scotty321 View Post


    With the U.S. economy weak and falling, with the U.S. dollar crumbling, and with the halt of most economic growth worldwide, I think it is pretty much IMPOSSIBLE that Apple stock will EVER be trading at $540 a share. I would say the chances of that happening are ZERO. Some reality from these analysts would be much appreciated. Two books that I've recently read, "Aftershock" and "The End of Growth", accurately lay out how the financial party days are over for ALL investors.



    Not just investors. Haven't you heard about http://en.wikipedia.org/wiki/2012_ph...on!?:rolleyes:
  • Reply 17 of 41
    Quote:
    Originally Posted by ibgarrett View Post


    Stocks get split so they can continue to raise capital to invest with.



    Hello?
  • Reply 18 of 41
    Quote:
    Originally Posted by sessamoid View Post


    Ah yes. Apple isn't smart, just lucky. That makes perfect sense.



    He wasn't talking about Apple.
  • Reply 19 of 41
    Quote:
    Originally Posted by anantksundaram View Post


    Not just investors. Haven't you heard about 2012?!



    Watching the Canadian market over the past few days makes me wonder if this is just a correction... almost 10% down over the past 10 days and down over 6% in the last 2 days.



    The sky is falling... the sky is falling... Nostradamus warned us about this... etc. etc.
  • Reply 20 of 41
    Meanwhile.



    Apple Is Within Spitting Distance Of Being World?s Most Valuable Company





    $16 Billion more to go!



    http://www.cultofmac.com/apple-is-wi...company/107698
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