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RBC ups Apple stock price target to $525 due to 'iPhone frenzy'

post #1 of 31
Thread Starter 
Investment bank RBC upped its price target for shares of Apple from $500 to $525 on Wednesday on expectations that the company will solidly beat Wall Street estimates for the first quarter of fiscal 2012 and offer healthy guidance going into the second quarter.

Analyst Mike Abramsky raised the firm's target on Wednesday In a note to investors entitled "iPhone Frenzy: Expecting Strong Q1 Results." The firm expects Apple to announce $40.2 billion in revenue and $11.00 earnings per share, up from prior projections of $38.6 billion and $10.00 EPS, next Tuesday.

RBC believes Wall Street will react favorably to the results because analysts' expectations were reset after transitions with Apple's iPhone product line during the September 2011 quarter resulted in a miss.

Abramsky believes Apple will report fiscal second quarter guidance of $32 billion in revenue and $8.00 EPS. Given that his estimates are slightly above Street guidance of $31.8 billion and $7.94 EPS, the analyst believes Apple's guidance will be "healthy." He also pointed out that fiscal second quarter guidance may include more global iPhone rollouts and the expected March launch of the third-generation iPad.

Global checks indicated "unprecedented iPhone sell-through," Abramsky said, noting stock outs in multiple regions. He estimates 32 million iPhones shipped in the December quarter, with 14.2 million coming from the U.S. A recent survey of analysts revealed that professionals expect 29.74 million units on average, while independent estimates were 33.4 million iPhones on average.




RBC expects Apple to report sales of 13 million iPads during the holiday quarter and 5.1 million Macs. The Street consensus for the iPad stands at 13.5 million units, according to one poll.

Apple reassured investors during its last quarterly earnings conference call that its fiscal first quarter would be a record-setting one. The company is guiding for unprecedented revenue of $37 billion during the period. The iPhone maker also said it is confident that it will break its all-time high for quarterly handset sales on the strength of the iPhone 4S launch.
post #2 of 31
Apple will have to throw in the towel and guide modest Q2 and Q3 due to lack of a competitive iPhone model. Europe has already lost interest despite Cook's promises last summer to address the market.
LTE/4"+ device better be released this year or the US/Asia will follow.
post #3 of 31
If it goes to $525, I'll be selling out

&

Breakdancing all the way to the bank haha!
post #4 of 31
Quote:
Originally Posted by jason98 View Post

Apple will have to throw in the towel and guide modest Q2 and Q3 due to lack of a competitive iPhone model. Europe has already lost interest despite Cook's promises last summer to address the market.
LTE/4"+ device better be released this year or the US/Asia will follow.

You know that less then 4% of phone purchases are LTE?
The far majority are not tech nerds. LTE brings zero advantage to 99.99% of the users. Downloading blurays to your Iphone seems just stupid. Using you 1 gig datacap in minutes have to one of the more insane things to do?

3G: 21 megabit
LTE: 50 megabit

With data caps: WHO CARES?

Todays LTE stuff have a battery penalty of 50% that is why Apple have to wait for 28nm LTE. Apple is hugely motivated to move to LTE simply because Apple pays Nokia over 1 dollar per 3G device in licensing fee's. Going to pure LTE would eliminate that fee.

BTW. I hate tech nerds who only look at numbers. That does not drive the user experience. Especially since most tech nerds don't have a clue and believe that 1.2ghz always is better the 1ghz, that 12 megapixels always are better then 8 megapixels. This is PC thinking and disregards design and optimization.

When you buy a car: sure performance is a small part of why you buy a specific car, but nobody is so insane that they buy a Skoda with 120HP instead of a BMW with 110HP. Its about design, how useful its for the consumer, how much fuel it draws, safety and so on. This is what computer industry will be like because its mass market, not nerd market.

Nerd market is for Android.
post #5 of 31
Quote:
Originally Posted by jason98 View Post

Apple will have to throw in the towel and guide modest Q2 and Q3 due to lack of a competitive iPhone model. Europe has already lost interest despite Cook's promises last summer to address the market.
LTE/4"+ device better be released this year or the US/Asia will follow.

You're really just talking about yourself here. Don't speak on behalf of a whole continent.
post #6 of 31
I know that around here, we can't even use the 3G features on phones, so 4G is just a dream. As for the rest of the country, I hear similar stores. So while some folks can use 3 and 4G, I'm not sure if the masses can, or if it matters to them.

It's very nice or at least cool, to have the latest and greatest of anything, but why pay for something you can't use?

Skip
post #7 of 31
Quote:
Originally Posted by shompa View Post

You know that less then 4% of phone purchases are LTE?
The far majority are not tech nerds. LTE brings zero advantage to 99.99% of the users. Downloading blurays to your Iphone seems just stupid. Using you 1 gig datacap in minutes have to one of the more insane things to do?

3G: 21 megabit
LTE: 50 megabit

With data caps: WHO CARES?

It's not all about bandwidth. Latency plays a big role and LTE's latency is a vast improvement over 3G. When browsing the web, improved latency is very noticeable.

However, I agree that the iPhone 4S's lack of LTE isn't a big issue. It's still a great product and it's evident that Apple has sold a lot of them.
post #8 of 31
Quote:
Originally Posted by ncee View Post

I know that around here, we can't even use the 3G features on phones, so 4G is just a dream. As for the rest of the country, I hear similar stores. So while some folks can use 3 and 4G, I'm not sure if the masses can, or if it matters to them.

It's very nice or at least cool, to have the latest and greatest of anything, but why pay for something you can't use?

Skip

You cant get use 3g? Why do even have a smartphone?

I have unlimited data and when the next iphone comes out and it finally has LTE I will be happy and damn sure be using the LTE to its fullest.
post #9 of 31
"RBC ups Apple stock price target to $525 due to 'iPhone frenzy'"

So the next version is going to be named iPhone Frenzy. I like it. To be followed by iPhone Fonzi.
post #10 of 31
Quote:
Originally Posted by shompa View Post

You know that less then 4% of phone purchases are LTE?
The far majority are not tech nerds. LTE brings zero advantage to 99.99% of the users. Downloading blurays to your Iphone seems just stupid. Using you 1 gig datacap in minutes have to one of the more insane things to do?

3G: 21 megabit
LTE: 50 megabit

With data caps: WHO CARES?

Todays LTE stuff have a battery penalty of 50% that is why Apple have to wait for 28nm LTE. Apple is hugely motivated to move to LTE simply because Apple pays Nokia over 1 dollar per 3G device in licensing fee's. Going to pure LTE would eliminate that fee.

BTW. I hate tech nerds who only look at numbers. That does not drive the user experience. Especially since most tech nerds don't have a clue and believe that 1.2ghz always is better the 1ghz, that 12 megapixels always are better then 8 megapixels. This is PC thinking and disregards design and optimization.

When you buy a car: sure performance is a small part of why you buy a specific car, but nobody is so insane that they buy a Skoda with 120HP instead of a BMW with 110HP. Its about design, how useful its for the consumer, how much fuel it draws, safety and so on. This is what computer industry will be like because its mass market, not nerd market.

Nerd market is for Android.

Not everyone has data caps.
3G from my experience on ATT ranges from 0.5 to 6, no where close to 21.
LTE from what I have seen in my area ranges from 10 to 28
post #11 of 31
Quote:
Originally Posted by jason98 View Post

Apple will have to throw in the towel and guide modest Q2 and Q3 due to lack of a competitive iPhone model. Europe has already lost interest despite Cook's promises last summer to address the market.
LTE/4"+ device better be released this year or the US/Asia will follow.

Considering that the LTE roll-out is even slower in Europe than it is in the US, I declare your comment pure BS.
post #12 of 31
Quote:
Originally Posted by Just_Me View Post

Not everyone has data caps.

...yet, and don't rely on being grandfathered in. that contract you signed likely has a line allowing your carrier to change policy at any moment without warning.
post #13 of 31
Quote:
Originally Posted by stelligent View Post

"RBC ups Apple stock price target to $525 due to 'iPhone frenzy'"

So the next version is going to be named iPhone Frenzy. I like it.

It's going to be total iPhone Frenzy frenzy !
post #14 of 31
Quote:
Originally Posted by Just_Me View Post

Not everyone has data caps.
3G from my experience on ATT ranges from 0.5 to 6, no where close to 21.
LTE from what I have seen in my area ranges from 10 to 28

And how long does it take before your battery runs down?

Even if (and that's a really, very big IF) you have LTE coverage that is actually a lot faster than 3G (which precludes almost everyone except people in a few major US cities and even less EU ones), the current 4G chipsets are simply terrible, plain and simple. Right now, every LTE phone uses a 1st generation LTE baseband alongside a 2G/3G baseband, which means you get terrible battery life. Everybody knows this, including the likes of Qualcomm, who make almost all LTE baseband chips. A full year ago Qualcomm itself has said that they have a much better baseband chip coming that does 2G/3G and LTE, and uses less power than just the LTE baseband in current phones.

You have to be bonkers to buy an LTE phone today if you know that they are nothing but prototypes right now, proof of concept that the technology works, that's it. This year the new LTE chipsets will hit the market that will in one swell swoop obsolete every LTE phone currently in existence. Leave all current LTE phone owners with a phone that runs out of juice in under 4 hours when is LTE enabled, and a full year left on their contract. It's the price you pay if you want to be an early adopter.
post #15 of 31
Quote:
Originally Posted by OllieWallieWhiskers View Post

...yet, and don't rely on being grandfathered in. that contract you signed likely has a line allowing your carrier to change policy at any moment without warning.

I know! I'm paying AT&T $5 extra a month to keep unlimited data on the assumption that I may need it in the future--knowing full well that when I need it, they will surely take it away...
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Progress is a comfortable disease
--e.e.c.
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post #16 of 31
This reminds of a post made October 4th, 2010 by zindako:



Even if it didn't reach $430, it was pretty close
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Mac Pro 5,1: 12 x 2.93GHz / 64 GB / ATI 5870 / 1.5+2+2+2+3TB / ACD 30" + 20"
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post #17 of 31
Quote:
Originally Posted by Garamond View Post

This reminds of a post made October 4th, 2010 by zindako:



Even if it didn't reach $430, it was pretty close

Nice one.

It's a fools' errand to forecast stock prices.
post #18 of 31
... and there's no WAY this bubble will burst...
post #19 of 31
Quote:
Originally Posted by Just_Me View Post

You cant get use 3g? Why do even have a smartphone?

I have unlimited data and when the next iphone comes out and it finally has LTE I will be happy and damn sure be using the LTE to its fullest.

I am not sure where you live or what carrier you have but if it is in America with AT&T or Verizon you won't be getting unlimited LTE (you can't grandfather 3G data and upgrade to LTE). Of course you WILL be paying more for LTE if you decide to upgrade with an iPhone that supports it.

AT&T and Verizon do not offer unlimited data and Sprint is a huge question mark with what they will offer when their LTE becomes a go. You can of course stay on 3G with your unlimited data but why get a LTE phone then, eh?
post #20 of 31
Quote:
Originally Posted by Habañero View Post

... and there's no WAY this bubble will burst...

The constant analyst pushing of Apple is becoming a big flashing neon sign to get out.
post #21 of 31
Quote:
Originally Posted by bronze View Post

The constant analyst pushing of Apple is becoming a big flashing neon sign to get out.

The constant analyst pushing of Apple is a big flashing neon sign that they all need fired since it's obvious Apple won't be getting to $666 by next month.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #22 of 31
Quote:
Originally Posted by Tallest Skil View Post

The constant analyst pushing of Apple is a big flashing neon sign that they all need fired since it's obvious Apple won't be getting to $666 by next month.

Just for that statement, I feel a need to buy 100 Feb 18 contracts with a $500 strike. For a mere $5,000 invested I would make $1.6M!!
post #23 of 31
Quote:
Originally Posted by Habañero View Post

... and there's no WAY this bubble will burst...

How is it a bubble when the PE ratio is only about 15?! The stock is undervalued by any rational means.
post #24 of 31
Quote:
Originally Posted by AkamaiGuy View Post

How is it a bubble when the PE ratio is only about 15?! The stock is undervalued by any rational means.

Ah, so you think the markets are rational? This could be a problem.

To keep your head straight, you should consider that a forward PE of 12 (not at all unheard of for AAPL) takes the stock price down to around $300. I'm not predicting this, but then I make it a habit to not predict anything. Anyone who's got any experience with investing, especially if they've been through the last 12 brutal years in the markets, knows to never say never.
Please don't be insane.
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Please don't be insane.
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post #25 of 31
Quote:
Originally Posted by jason98 View Post

Apple will have to throw in the towel and guide modest Q2 and Q3 due to lack of a competitive iPhone model. Europe has already lost interest despite Cook's promises last summer to address the market.
LTE/4"+ device better be released this year or the US/Asia will follow.

This is a perfect example as to why clueless tech-heads/nerds have no business making consumer products. If we listened to you, Apple would be like Android - a total mess.

Of course, I'm going under the assumption that you're not just trolling this forum with your fabricated nonsense, and that you have not responded to anyone's reply.
post #26 of 31
Quote:
Originally Posted by sflocal View Post

This is a perfect example as to why clueless tech-heads/nerds have no business making consumer products. If we listened to you, Apple would be like Android - a total mess.

Of course, I'm going under the assumption that you're not just trolling this forum with your fabricated nonsense, and that you have not responded to anyone's reply.

No need to respond now. Let's back to this thread after the earnings call and q2 guidance release.
post #27 of 31
Quote:
Originally Posted by jason98 View Post

No need to respond now. Let's back to this thread after the earnings call and q2 guidance release.

No, let's discuss why Apple didn't release a 4" LTE iPhone in 2009 right now.

Seems to me that that's not what people as a whole really want. Apple's not in the market of giving every single person exactly what they want; they've never been.

You know those scatter charts you often see? The ones with a bunch of data points? And there's generally a single line drawn up through them that is the average of all the points or whatever?

That's Apple. They look at the field, they aim for the highest concentration, and they take it with one shot.

It's not because they can only afford one arrow or that their bowstring snaps after the first shot, they just don't need another one.

One shot, one kill. Apple is the sniper of the industry, but they're sniping successfully with a shotgun.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #28 of 31
Quote:
Originally Posted by jason98 View Post

Apple will have to throw in the towel and guide modest Q2 and Q3 due to lack of a competitive iPhone model. Europe has already lost interest despite Cook's promises last summer to address the market.
LTE/4"+ device better be released this year or the US/Asia will follow.

Europe is broke that's why they can only afford the poor man's iPhone.

Apple is betting on the China card which is more promising.

No reason to release half baked products which is more damaging than being late but a best I. its class products.

Btw all the pundits condemned the 4s but the public loved it, need I say more.
post #29 of 31
Quote:
Originally Posted by Dr Millmoss View Post

Ah, so you think the markets are rational? This could be a problem.

To keep your head straight, you should consider that a forward PE of 12 (not at all unheard of for AAPL) takes the stock price down to around $300. I'm not predicting this, but then I make it a habit to not predict anything. Anyone who's got any experience with investing, especially if they've been through the last 12 brutal years in the markets, knows to never say never.

I thought the Forward P/E for AAPL at the levels it's at now (or actually the levels it was at about a month ago) takes it down to a 9 or 10?

As for AAPL's price movement this year. Predicting might be a fool's errand, but not necessarily illogical. AAPL Stock has had the fear card used against it, ad nausea, for years now ("Never gonna hit 2, 3, 4 hundred, etc.). I don't think that anyone disagree's that AAPL should be at well over $500 right now. The reasons it isn't clearly lies around the holdback on the Stock after Mr. Jobs' unfortunate health situations arose, and the aftermaths that followed.

I'll just put it this way, just as they said in 2011 that "If AAPL doesn't hit $400, it will be a big upset", which was said at around June, btw, when the Stock was fumbling around the mid $300's, then dropped to almost $300 before racing up, I feel that if AAPL doesn't heavily surpass the $500 mark this year, it'll be a huge upset. A favorable reaction from Wall Street after Q1's Earnings Call can send the stock to the high $400's already, putting $500 in near sight. Of course, the other way around can happen as well.

As a longer term Investor, regardless of Wall Street's knee-jerk reaction to this call, I have no doubts that the Stock's pressure will release as new Products roll out, people get confident in the "New Management" (which is the always-Management), and it will move to levels well beyond $500. Hopefully I'm right.
post #30 of 31
Quote:
Originally Posted by Godzilla View Post

I thought the Forward P/E for AAPL at the levels it's at now (or actually the levels it was at about a month ago) takes it down to a 9 or 10?

As for AAPL's price movement this year. Predicting might be a fool's errand, but not necessarily illogical. AAPL Stock has had the fear card used against it, ad nausea, for years now ("Never gonna hit 2, 3, 4 hundred, etc.). I don't think that anyone disagree's that AAPL should be at well over $500 right now. The reasons it isn't clearly lies around the holdback on the Stock after Mr. Jobs' unfortunate health situations arose, and the aftermaths that followed.

I'll just put it this way, just as they said in 2011 that "If AAPL doesn't hit $400, it will be a big upset", which was said at around June, btw, when the Stock was fumbling around the mid $300's, then dropped to almost $300 before racing up, I feel that if AAPL doesn't heavily surpass the $500 mark this year, it'll be a huge upset. A favorable reaction from Wall Street after Q1's Earnings Call can send the stock to the high $400's already, putting $500 in near sight. Of course, the other way around can happen as well.

As a longer term Investor, regardless of Wall Street's knee-jerk reaction to this call, I have no doubts that the Stock's pressure will release as new Products roll out, people get confident in the "New Management" (which is the always-Management), and it will move to levels well beyond $500. Hopefully I'm right.

My mistake, I meant to type "trailing" PE. Sorry to have confused matters.

You must be reading different analysts than the ones I see. Many of the current one-year price targets are over $500 (the average now according to Yahoo Finance is $511), and they've been projected for 25%+ annual stock price growth by street consensus for years. The street has been bullish on AAPL for a long time. I've been in this stock for nearly 15 years so I see a vast difference in the psychology and coverage over the last five years or so.

The main reason I hesitate to predict anything in the stock markets, even for a stock I follow closely like AAPL, is the existential factors that have nothing to do with Apple's performance as a company. Everybody is watching Europe out of the corners of their eyes. If the eurozone can't control their debt crisis and it turns into a full-scale banking crisis, then we're all fried.

I feel the markets have already fully absorbed the news of Steve's demise, so that particular "risk factor" for AAPL is no longer in play. But in the end the markets only believe in the numbers anyway. Cook and his team will have to produce earnings growth.
Please don't be insane.
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post #31 of 31
I see what you're saying. I do think that Steve's shadow still strongly looms over the company. If Steve didn't get sick, I have little doubt that this Stock would be at like $800 or so (playing the fool's game again, lol). Just today, some idio-Analysts had a show stating that "Apple has 6-12 months" BS, with statements like "they need to prove that they can innovate without Steve". People are still on the lookout, but yes, numbers will do most of the talking.
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