Firm slaps $1001 target on Apple shares ahead of $100B integrated television opportunity
Arguing that Apple's dominance of the consumer electronics market is positioned to go unchecked for the foreseeable future, Topeka Capital Markets on Monday initiated coverage of the iPad maker with a staggering $1001 price target on the company's shares.
In an inaugural research note to clients, analyst Brain White said he believes the 'Apple story' has a long way to play out over the coming years despite the company's already dominate market position, with the next 12-18 months expected to serve as a 'particular exciting' time for the company on multiple fronts.
"Driven by an ever expanding portfolio of innovative products, a growing integrated digital grid, unmatched aesthetics and a brand that is able to touch the soul of consumers of all backgrounds, Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend," he said.
In particular, White argues that Apple "remains the premiere play on the rise of the mobile Internet around the world" and stands well positioned to capitalize on the trend, especially in China where 3G subscriber rates are expected to swell to 230 million by year's end and make the country's mobile ecosystem "one of the wonders of the technology world."
In supporting his 12-month price target of $1001, the analyst also identified the recent launch of the company's 1080p-capable Apple TV (review) as "another step down the road" toward the company introducing a full-blown integrated television in the future.
"Apple's digital grid is tough to match and iCloud further strengthens this ecosystem, however, Apple is missing an important product and that is a full blown TV," he said. "We believe the pieces are in place for a launch over the next year, driving an entirely new $100 billion market opportunity, while further strengthening the company's digital grid and providing customers with a new TV experience."
Wall Street darling Apple has already seen its shares rise more than 45% from the start of the year when shares were trading at just $411. A blockbuster first fiscal quarter and the subsequent launch of the new iPad help boost shares above the $600 milestone for the first time in the company's history last month.
Though shares retreated somewhat last week as investors took profits and others weighed the risk of continued investment in the company, shares of the company regained their momentum Monday after White issued his note and are currently trading at $610.49, up approximately $11 (or 2%) from Friday's close.
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Comments
Somebody from the government better step in and slow the sh** down.
(referring to stock price, not Apple itself)
Hell no!!!
Somebody from the government better step in and slow the sh** down.
In just one post, you've created two of the most powerful points (usually associated with knee-jerk or semi-trolling reactions) on this matter. Congrats.
As my rebuttal, the government should NOT step in (because what business is it of theirs?), and the stock should NOT be slowed until it reaches its proper balance on its own (which it will). We're in no danger of anything yet.
$1001 is funny though. Sounds more like a Price is Right bid. I'm guessing this prediction contains a bit of showmanship.
"And the actual retail price of a share of Apple stock in 2015 IS… …One thousand and TWO dollars!"
*Ding ding ding ding ding…*
Past performance is no guarantee of future results but it's gone up 50% in the last quarter and the trajectory looks good. At $609 today (whoops, $610) it continues to defy many, many expectations. I'm astonished at the disparity in PE multiples, too. Amazon earns almost 150 times earnings and hasn't ever been below 25 times earnings. AAPL is a little over 17 but their positive earnings surprises are consistent and astounding.
That Price/Earnings ratio will drop several notches in a couple of weeks, although it may also climb a couple of notches in the meantime. Some independent analysts are predicting better than a 100% year over year improvement in earnings for the just completed quarter. That will boost year over year total earnings from $32.982 billion to at least $39.382 billion. At, say, $650/share (my guess for the stock price just before earnings are released), that would reduce the P/E ratio to (650/39.4=) 16.5.
As you say, that's a far cry from Amazon's sky-high P/E ratio, although that mostly due to the tiny overall margin Amazon earns (high price/low earnings equals a very high P/E ratio - and vice versa).
There is no doubt that Apple has lots up its sleeve (TV, car electronics, health, education) that will be successful in the market, but the question is whether it can achieve the scale of success required to move the needle sufficiently. For example, a product that has a net present value of $10B increases your stock price by 10% when you're a $100B company, but by only 2% when you're a $500B company. You'll need a $50B NPV product at that scale to have a similar impact.
That is tough.
If it's just the current set of (fabulously successful, and still lots of room for growth) products, I doubt that this price forecast can be justified.
I think things will go sideways (perhaps slightly up) for a while in a wait-and-see mode, until the market can sort this out.
Don't be surprised if Apple's stock zooms to $2000 before years end.
I seriously doubt that the analyst's name is "Brain" White.
And, Apple has a dominant market position; not "dominate".
Well, I thought the $550 prediction was far fetched, back when she was still trading at around $300. Sigh.
It all depends on whether Apple has another couple of of blockbuster new products a la the iPod, iPhone, and iPad in the offing. Whether it does, and how impactful it will be, is difficult to predict.
THIS.
I'm going to play devils advocate on this one... apart from the iPhone and iPad (and MAYBE the Notebook), are there REALLY any other RUNAWAY successes for Apple?
My point is - there's A LOT of expectations for Apple. And the tough thing about being the flavor of the month for consumers and Wall Street, is that unless you keep up the momentum, Apple's meteoric, almost overnight rise, can become an almost overnight free fall.
Apple going into TV is a BIG risk. A TV isn't a $200 phone or $500 iPad or even a $999 notebook pc. It's a $2000+ purchase that most people won't get in line for, get rid of in 2 years.
And given the UI/features found with AppleTV - adding AppleTV to an HDTV really isn't THAT exciting. Really, would you pay a $1000+ premium on a TV, when Apple sells a $99 accessory that allows you to do the same thing?
And if it adds Siri... so you can talk to a TV. Again, a $1000+ worthy feature?
Obviously I am making some assumptions. And again, I am playing devils advocate.
THIS.
I'm going to play devils advocate on this one... apart from the iPhone and iPad (and MAYBE the Notebook), are there REALLY any other RUNAWAY successes for Apple?.
How many do they need to make you happy?
- iPod
- iPhone
- iPad
- MacBook Air
- Apple TV (to a slightly lesser extent)
- Apple Retail Stores
- Apple online store
Apple's profits are a fraction of the billions it will save schools in books and *airlines in extra fuel lugging tons of flight manuals. It's also a fraction of the value of all the new secondary support jobs it creates. Students learn much more on an iPad then from a book so maybe we can move up from dead last in education in the world. *iPads *help train our military for the digital age and Apple is starting to invest and rebuild America WITHOUT bailouts. Apple tries to improve the lives of the workers in its supply chain and most of all Apple is making people see that creativity is not dead in America. I don't know of any other company that has done and can do so much.
Don't be surprised if Apple's stock zooms to $2000 before years end.
Uzzz no izzz gonna b rite
How many do they need to make you happy?
- iPod
- iPhone
- iPad
- MacBook Air
- Apple TV (to a slightly lesser extent)
- Apple Retail Stores
- Apple online store
iPod, iPad and iPhone are huge hits and account for three quarters of Apple's revenue. The MacBook Air is not in the same league and the AppleTV is still just a hobby.