Merrill Lynch ups Apple target to $88
Based on rising estimates and a view that existing and forthcoming products are likely to create earnings power in excess of $4, Merrill Lynch has increased its price target on shares of Apple Computer from $72 to $88.
"We think the improvements to the iPod line, though incremental, are enough to keep Apple's devices ahead of competitors in feature-adjusted price/performance in the intermediate term," analyst Rich Farmer wrote in a brief research note Wednesday morning.
"Apple did not announce a full-screen touchless interface iPod, nor WiFi support for iPods, which may be disappointing to some investors with more aggressive expectations, though we expect these innovations to emerge in coming quarters."
Although there was no iPhone announcement made during Apple's special media event on Tuesday, Farmer said he continues to expect that such a product will be introduced prior to the second half of 2007.
"If Apple were to achieve mobile phone share equal to its PC share, it could eventually add more than $0.90 to the run-rate of consensus estimates of approximately $3.09 in [fiscal year] 2008," he wrote. "In the long run we see fewer structural constraints on share gains in mobile devices (including phones) than exist for Apple versus Windows in the PC market."
Farmer also thinks that Mac share gain assumptions are currently conservative. For the aforementioned reasons, the analyst raised his fiscal year 2008 earnings-per-share estimate from $3.17 to $3.54 to reflect one point of share in mobile phones, net of iPod cannibalization.
Merrill Lynch maintains a "Buy" rating on Apple shares.
"We think the improvements to the iPod line, though incremental, are enough to keep Apple's devices ahead of competitors in feature-adjusted price/performance in the intermediate term," analyst Rich Farmer wrote in a brief research note Wednesday morning.
"Apple did not announce a full-screen touchless interface iPod, nor WiFi support for iPods, which may be disappointing to some investors with more aggressive expectations, though we expect these innovations to emerge in coming quarters."
Although there was no iPhone announcement made during Apple's special media event on Tuesday, Farmer said he continues to expect that such a product will be introduced prior to the second half of 2007.
"If Apple were to achieve mobile phone share equal to its PC share, it could eventually add more than $0.90 to the run-rate of consensus estimates of approximately $3.09 in [fiscal year] 2008," he wrote. "In the long run we see fewer structural constraints on share gains in mobile devices (including phones) than exist for Apple versus Windows in the PC market."
Farmer also thinks that Mac share gain assumptions are currently conservative. For the aforementioned reasons, the analyst raised his fiscal year 2008 earnings-per-share estimate from $3.17 to $3.54 to reflect one point of share in mobile phones, net of iPod cannibalization.
Merrill Lynch maintains a "Buy" rating on Apple shares.
Comments
wow, Apple is certainly going places now
btw can anyone explain to a newcomer what is meant by "price target" ? I assume it means the price to sell at, but if it doesn't please tell me.
"likely to create earnings power in excess of $4"
wow, Apple is certainly going places now
btw can anyone explain to a newcomer what is meant by "price target" ? I assume it means the price to sell at, but if it doesn't please tell me.
I'm pretty sure that it means their prediction of the stock price based on the current number of shares (obviously the target would be cut in half if the stock splits 2:1), 12 months from the day the target is quoted.
they are always wrong and usually put out their "predictions" right after product anouncements after the stock shoots up - which is usually the worst time to buy.
it just means where these idiots think the stock should be/is headed.
they are always wrong and usually put out their "predictions" right after product anouncements after the stock shoots up - which is usually the worst time to buy.
I've noticed that it has become quite popular on this site to bash stock analysts. While I agree that they are not very good fortune tellers, I do think that they are (or at least a good portion of them) providing a valuable service to the market. They do some fairly advanced evaluations to come up with the profit/share and target price numbers they come up with and they provide useful guides to investors who want to know what their risk/expected rate of return will be on a given investment.
I've noticed that it has become quite popular on this site to bash stock analysts. While I agree that they are not very good fortune tellers, I do think that they are (or at least a good portion of them) providing a valuable service to the market. They do some fairly advanced evaluations to come up with the profit/share and target price numbers they come up with and they provide useful guides to investors who want to know what their risk/expected rate of return will be on a given investment.
Don't tell me... your analysis.
Don't tell me... your analysis.
huh? <adds obligatory extra characters>
I've noticed that it has become quite popular on this site to bash stock analysts. While I agree that they are not very good fortune tellers, I do think that they are (or at least a good portion of them) providing a valuable service to the market. They do some fairly advanced evaluations to come up with the profit/share and target price numbers they come up with and they provide useful guides to investors who want to know what their risk/expected rate of return will be on a given investment.
Agreed. Stock analysts are like megaphones to the general public. They gather information from all over just like we do, summarize it, and make it understandable to a public that doesn't have the time or energy to do what we do. So yes, it sounds like they just repeat what we say, but it's important for the markets to work.
Agreed. Stock analysts are like megaphones to the general public. They gather information from all over just like we do, summarize it, and make it understandable to a public that doesn't have the time or energy to do what we do. So yes, it sounds like they just repeat what we say, but it's important for the markets to work.
Of course. Investors are zombies that need to be told that the living room consumer electronics market is untapped, so they should invest in Apple to boldly go where no consumer electronics have gone before. But they might have been channeling a 1930's stock analysis there.
I'm pretty sure that it means their prediction of the stock price based on the current number of shares (obviously the target would be cut in half if the stock splits 2:1), 12 months from the day the target is quoted.
Yes, of course.
But i have to agree with him.
Not only for this, but because I've been reading a lot of articles lately that state that Apple's marketshare gain in computers next year might explode, going much higher than had been expected.
I think this is possible. In just talking to people I know in business, there is much more interest that there had been in a very long time. The same thing with schools. There is much less resistance to Mac's in school from parents than there has been since I've been involved in that.
it just means where these idiots think the stock should be/is headed.
they are always wrong and usually put out their "predictions" right after product anouncements after the stock shoots up - which is usually the worst time to buy.
That's so absurd.
Agreed. Stock analysts are like megaphones to the general public. They gather information from all over just like we do, summarize it, and make it understandable to a public that doesn't have the time or energy to do what we do. So yes, it sounds like they just repeat what we say, but it's important for the markets to work.
People who don't invest don't understand what they do.
But, also it's the internet, and people say things they wouldn't say in person.
Of course. Investors are zombies that need to be told that the living room consumer electronics market is untapped, so they should invest in Apple to boldly go where no consumer electronics have gone before. But they might have been channeling a 1930's stock analysis there.
Investors aren't zombies. But most don't have the resources to find out this information on their own, or know how to interpret it.
What is forgotten in many posts here, is that the statements they release are perhaps less than 1% of the information given in their paid for reports. If people read them, they wouldn't say what they do.
Yes, of course.
But i have to agree with him.
Not only for this, but because I've been reading a lot of articles lately that state that Apple's marketshare gain in computers next year might explode, going much higher than had been expected.
I think this is possible. In just talking to people I know in business, there is much more interest that there had been in a very long time. The same thing with schools. There is much less resistance to Mac's in school from parents than there has been since I've been involved in that.
I've found the same, lots of people interested in Macs... and not really because they can run Windows either...