With new iPad & Macs coming, $500 milestone seen as just the start for Apple stock

Posted:
in AAPL Investors edited January 2014


Apple's stock crossed the $500 mark for the first time ever this week, but a new analysis sees that threshold as just the beginning, with new iPad and Mac models on the horizon that could help push the price toward $630.



Analyst Ben A. Reitzes said in a note to investors on Tuesday that he sees several potential catalysts for Apple in the near future. The most imminent is a new iPad, which is expected to be unveiled at a media event on March 7.



In addition to releasing a new third-generation iPad, Reitzes believes that Apple will continue to sell the current-generation iPad 2. He sees the entry-level 16GB model remaining available for sale at a reduced price, giving Apple more traction on the lower end of the market.



But the iPad is just one of six potential catalysts seen by Reitzes, who believes AAPL stock can go to $630. As a second catalyst, he sees further innovation coming with Apple's Mac lineup, expanding upon the success of the thin-and-light MacBook Air.



The analyst believes that Apple is contemplating placing ARM-based low-power processors in some new Mac models, replacing the Intel chips that currently power its product lineup. He thinks the soonest that would happen is by the end of 2013.



Reitzes holds that prediction despite the fact that Apple Chief Executive Tim Cook indicated earlier this month that an ARM-based MacBook Air is an unlikely product. instead, he hinted that new features continually being added to the iPad will "soon satisfy" the needs of those who would be most interested in an ARM-based MacBook Air.



Beyond the Mac lineup, another catalyst seen by Reitzes is a new iPhone he expects to debut in the second half of 2012, with a late September date specifically cited as "likely."



"This iPhone should boast a new design, fast 4G LTE capabilities, a faster processor, a larger screen, a better camera, Siri and more features that could even include NFC capabilities," he said. "In short, this iPhone cycle should be the big one causing investors to envision an eventual quarter with 50 million plus units."



In addition, more iPhone distribution, particularly in China, is seen as a fourth potential catalyst for AAPL stock by Reitzes. The addition of new carriers like China Telecom and China Mobile could be a major driver of upside to iPhone units in 2012, he believes. Currently, the iPhone is only available on China Unicom.











The fifth catalyst cited was the prospect of a full-fledged television set from Apple. He sees such a device including iCloud access, as well as new TV-centric applications from the App Store. He also sees the inclusion of Siri voice control as a "groundbreaking interface for TV."



"We are still not ready to proclaim that an Apple Television will be 100% ready in 2012 as we believe that the next generation of iPhones and iPads will remain the company's focus for the near term," he said. "It appears more and more likely that the company is actively engaging partners about a potential device and content."



The sixth and final potential catalyst laid out by Reitzes was a hypothetical "return cash to shareholders" policy, which he believes would be a strong use of the nearly $100 billion in cash and investments being held by Apple. He noted that with that much cash, Apple is "running out of realistic excuses for hoarding so much," and he believes that investors are already beginning to price into AAPL stock the expectation of a dividend as soon as the upcoming shareholders' meeting on Feb. 23.



"We continue to believe Apple has the ability to easily pay a dividend with a significant yield (2-3% range) along with the ability to grow it over time," he said. "Furthermore, we believe consistent buybacks would be a better option than an accelerated buyback or a special dividend.



"We believe that Apple has recently sounded much more open in its propensity to offer a dividend and its Board likely realizes its potential value. We believe a dividend could be instated by calendar year end."



Barclays Capital has maintained its "overweight" rating for AAPL stock, which hit the $500 milestone on Monday. Its price target of $630 is unchanged.



[ View article on AppleInsider ]

«13

Comments

  • apple ][apple ][ Posts: 8,057
    I was a fool! I had a little bit extra money to invest recently and I was thinking about picking up some AAPL when it was just over $450 a short while ago. I didn't bite, and now it's over $500 and it just seems to keep rising!



    Anyhow, for my own purely selfish reasons, I hope that the stock goes down a little, and then I'll make my move. Come on China, ban the iPad! That'll send the stock down for a little bit.
  • williamhwilliamh Posts: 280member
    I think they'll do the same thing they did with the phone. Not a 16gb iPad2 but an 8gb iPad2 as the entry level, lowest price product.
  • tallest skiltallest skil Posts: 40,290member
    Quote:
    Originally Posted by williamh View Post


    I think they'll do the same thing they did with the phone. Not a 16gb iPad2 but an 8gb iPad2 as the entry level, lowest price product.



    8GB on a tablet is worthless.
  • apple ][apple ][ Posts: 8,057
    I have a simple question for anybody who knows about stocks and is reading this.



    I see that some analysts are talking about a target price of $630. My question is, what time frame is that based on? Do they mean in 12 months from now?
  • solipsismxsolipsismx Posts: 19,566member




    When is this going to happen based on their current growth rate?
  • apple ][apple ][ Posts: 8,057
    Quote:
    Originally Posted by Tallest Skil View Post


    8GB on a tablet is worthless.



    Indeed it is. Do these people not realize that the OS takes up a bit of space too?
  • tallest skiltallest skil Posts: 40,290member
    Quote:
    Originally Posted by SolipsismX View Post


    When is this going to happen based on their previous growth rate?



    AAAHHHH, GOATSE?
  • Quote:
    Originally Posted by Apple ][ View Post


    I have a simple question for anybody who knows about stocks and is reading this.



    I see that some analysts are talking about a target price of $630. My question is, what time frame is that based on? Do they mean in 12 months from now?



    yes its usually a 12 month prediction
  • apple ][apple ][ Posts: 8,057
    Quote:
    Originally Posted by All Day Breakfast View Post


    yes its usually a 12 month prediction



    Ok, great. Thanks.
  • blastdoorblastdoor Posts: 1,220member
    Quote:
    Originally Posted by SolipsismX View Post






    When is this going to happen based on their previous growth rate?



    I think they reached 250/share about two years ago. So if that were to continue it would be maybe the second quarter of 2014 that they cross the trillion dollar market cap line.



    That's not so hard to believe. If the overall economy improves and P/E ratios inflate a bit across the board, they could totally that even if their profits don't grow quite as fast over the next two years as they have over the previous two years.
  • sflocalsflocal Posts: 3,458member
    What I would like to see... and buy, is an iMac using MBA-style SSD cards to really make that display thinner, lighter, and less heat, and of course making it a retina display. High-capacity internal storage can pretty much be handled now with a Thunderbolt external disk array.



    One can hope.



    As a very happy AAPL holder, I'm just jumping in joy knowing that Apple (imho) is just getting started to blast off. Presuming China gets its head out of its backside with the Proview drama, it will be smooth and profitable sailing!
  • mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by Tallest Skil View Post


    8GB on a tablet is worthless.



    It may not be worthless but it certainly can't be used for iBooks textbooks. I'm working on this right now and a single textbook could easily be 8 gigs all by itself. What I don't know is how Apple expects us to deliver these textbooks. Are we going to sell them by chapter or what? I can't see downloading a single file of such a large size. I think they may need to reconsider the business model because these files are unweildy.
  • shompashompa Posts: 338member
    Quote:
    Originally Posted by Apple ][ View Post


    I have a simple question for anybody who knows about stocks and is reading this.



    I see that some analysts are talking about a target price of $630. My question is, what time frame is that based on? Do they mean in 12 months from now?



    They don't know. "analysts" are almost always wrong.

    Usually they make these kinds of reports to drive the shares they way they want.



    We will soon get a couple of "Apple is doomed" analyst to drive down the stock, while they are shorting the stock.



    Have zero respect for Analytics especially in technology there they know zero about technology.
  • ka47ka47 Posts: 25member
    When the stock price reaches $1,072.82, APPLE will be the first trillion dollar company!

    I hope that day will come soon!
  • gtrgtr Posts: 3,165member
    Quote:
    Originally Posted by SolipsismX View Post






    When is this going to happen based on their current growth rate?



    The United States of Australia?



    I need to go check my wallet to see if this is correct...
  • maccherrymaccherry Posts: 924member
    I want to be able to write on the iPad as I do on paper with lag I can't perceive. Sc** handwriting recognition. That is yesterday to me. I want to be able to sit in class and use a stylus on the iPad and take notes like I'm using a 7mm sharp writer pencil(the best, IMHO, on the market). And there should be just an awesome cataloging system for your notes. Y'all know what I mean!!!!!
  • Great analysis other stock price catalysts not mentioned



    #1 A 10 for 1 stock split worked very well for BIDU a little over a year or so ago.(also Berkshire)

    #2 Re-institution of a small dividend with intention to raise over time with stock price

    #3 Small stock buy back program and DRIP progtams done by almost all large caps

    #4 Aquisition of complimentary companies with stock swaps

    like Interdigital(IDCC) Arm Holdings(ARMH) Nuance(NUAN)



    Actions above would open whole new classes of new investors driving stock price lots hihger.
  • solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by GTR View Post


    The United States of Australia?



    I need to go check my wallet to see if this is correct...



    I didn't read that image very well when I searched for it. Was looking for Dr.Evil saying one trillion dollars but came up short.
  • tallest skiltallest skil Posts: 40,290member
    Quote:
    Originally Posted by mstone View Post


    It may not be worthless but it certainly can't be used for iBooks textbooks. I'm working on this right now and a single textbook could easily be 8 gigs all by itself. What I don't know is how Apple expects us to deliver these textbooks. Are we going to sell them by chapter or what? I can't see downloading a single file of such a large size. I think they may need to reconsider the business model because these files are unweildy.



    I'm thinking it's just that the .ibooks format is absolutely terrible.



    Meaning it's not streamlined or pared down or anything. It's just a bunch of raw data and unnecessary bloat.



    You know how in the E. O. Wilson book, you can have the interactive stuff from the landscape view on the left sidebar in portrait? I can't figure out how to get my own images and interactive stuff there in my book without making entirely new ones and doubling it up in size.



    I think that Life On Earth is a GIGABYTE for two chapters because .ibooks is just bloated right now. Hopefully that will be fixed.
  • beeman60beeman60 Posts: 52member
    Quote:
    Originally Posted by maccherry View Post


    I want to be able to write on the iPad as I do on paper with lag I can't perceive. Sc** handwriting recognition. That is yesterday to me. I want to be able to sit in class and use a stylus on the iPad and take notes like I'm using a 7mm sharp writer pencil(the best, IMHO, on the market). And there should be just an awesome cataloging system for your notes. Y'all know what I mean!!!!!



    I'd buy it in a minute. I have a billion little notes in my office - all on post its and small steno pads - would love to be able to instead use the iPad as my filing draw of doodles, notes, ideas - all stuff I create with my hands and fingers cradling and moving a pen - not with a keyboard.
Sign In or Register to comment.