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Evercore raises Apple price target to $750 on new dividend, iPad momentum

post #1 of 29
Thread Starter 
Evercore Partners analyst Rob Cihra has raised his price target for shares of Apple to a record $750 in light of the company's new quarterly dividend and strong iPad demand.

Apple's stock hit a new milestone on Monday when it closed past the $600 mark. The surge came after Apple announced earlier in the day that it was initiating a dividend of $2.65 per share and a share repurchase program.

The Cupertino, Calif., company also revealed the good news on Monday that sales of the new iPad during its recent launch weekend topped 3 million. Executives have indicated that they are "thrilled" with the record weekend.

In a note to investors, Cihra called the 1.8 percent yield "modest," while predicting that it will "help broaden" Apple's investor base. He characterized the company's share repurchase program as "long overdue." The analyst viewed the announcements as meaningful because Apple "at least broke the seal."

"Even factoring in the new dividend and small buybacks, we model Apple exiting CY13 with net cash approaching $180B or $190/share, leaving room for today’s initial payout metrics to expand," he said.

Cihra, a five-star rated analyst according to Starmine, raised his estimate for first quarter calendar 2012 iPhone sales from 30 million to 32 million units. He also lift his iPad estimate from 10 million to 13 million on "strong initial uptake."

The investment bank advisory firm pointed to an "upside in momentum out of the gates" as the reason for the increase in its iPad estimate. For calendar 2012, Evercore now expects sales of 66 million, up from 59 million.

Cihra added that he continues to "see prospects for a unique mid-cycle iPad refresh" coming around September. The update could bring the introduction of a quad-core A6 processor and a "new smaller 8-inch model," he wrote.




The firm reiterated its Overweight and Top Pick ratings for Apple and raised its price target to $750 from $650.

With Apple soaring nearly 20 percent in the last month alone, analysts have been scrambling to adjust their price targets. Earlier in March, FBN Securities set a high with a price target of $730. Last week, Morgan Stanley lifted its price target to $720, and Piper Jaffray upped its own to $718.

[ View article on AppleInsider ]
post #2 of 29
I'll be THAT guy again here.

Despite what Apple may claim on their earnings call, I sense that the timing of this dividend announcement to be somewhat unusual.

Normally, dividends are announced to keep the stock price's momentum. Perhaps Apple was seeing the looming lawsuits (majority of which have not had any impact) and the increased competition from competitors as an ominous sign about the future. Hence, the dividend and share buyback announcement.

Just my 0.02 cents.

I threw the bait. Hope I get a big fishy today.



Full disclosure: I'm an AAPL shareholder.

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #3 of 29
I would like to commend the writer Josh Ong for actually mentioning Cihra's StarMine rating.

Too often, we see AI (and other tech media sites) mindlessly quoting analysts without mentioning overall track records. Several popularly-quoted analysts that are not star-rated include: Gene Munster (Piper Jaffray), Shaw Wu (Agee), Katy Huberty (Morgan Stanley). You can basically chuck their analyses into the circular file.
post #4 of 29
$750 over the next 12 months? I'm thinking a 25% gain over a year is excessively conservative unless qualified with some data that explains a major drop in the market overall or in Apple's ability to maintain sales.



PS: Galbi is admitting he's just baiting posters to derail the thread. What does it take to send tachy to purgatory?

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post #5 of 29
Wish Steve was alive to see these numbers.

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post #6 of 29
The target prices are again pulling away from the current stock price. As soon as Apple gets within range, it seems the targets are raised another $100 or so. If Apple even reaches $650 this year, I'll still be very happy. Long since 2004.

I also wish Steve were around to see how well his company was doing. He did such a wonderful job for the company and almost singlehandedly changed the cellphone and computer industries. I kept hoping he was going to live longer, but it just wasn't meant to be.
post #7 of 29
Quote:
Originally Posted by SolipsismX View Post

$750 over the next 12 months? I'm thinking a 25% gain over a year is excessively conservative unless qualified with some data that explains a major drop in the market overall or in Apple's ability to maintain sales.

I agree.

The prediction I made a year ago was that we would see $1000 by next Jan. This was looking a bit shaky with the unforeseen events last year, but not so anymore.
post #8 of 29
Quote:
Originally Posted by Constable Odo View Post

Long since 2004.

$10.64 to $32.575.

Just trying to get an idea how much I need to sweet talk ya.

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post #9 of 29
Is the world getting better at predicting Apple's moves (dividend, stock repurchase, iPad with Retina display, iPad with LTE), or is Apple security getting lax (their plans getting leaked), or is Apple caving in to the noise?

I hope Apple doesn't release an 8" tablet just because lots of "analysts" predict that it would appeal to the budget conscious or raise the share price - usually the most innovative products catch everyone off guard and it's a surprise they do so well! I'm not sure what an 8" tablet would bring to the table. Would it really deliver a "magical" experience or would it be kind of like video on the iPod nano - a joke or a checkbox feature for the clueless or uninformed? Sorry to those out there who just can't live without video on their nanos.

On the other hand if they've done their homework, and found that 8" delivers a magical experience too, and has other benefits for consumers, then they should punish that son of a bitch exec at Samsung who leaked their info to the world. Unless that was an intentional leak. But why would Apple do that?
post #10 of 29
Quote:
Originally Posted by jd_in_sb View Post

Wish Steve was alive to see these numbers.

I think he would've liked to see Apple be a success, but for him it was never completely about the money. He basically wanted to destroy his enemies and make them suffer for doubting him.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #11 of 29
Quote:
Originally Posted by SpamSandwich View Post

I think he would've liked to see Apple be a success, but for him it was never completely about the money. He basically wanted to destroy his enemies and make them suffer for doubting him.

Steve Jobs passed away almost two months after they first passed Exxon to become the world's most valuable company. It was a couple weeks after they first passed Exxon that Steve stepped down as CEO. Based on the roadmap he had set for the company I don't think there is anything going on today that he would be surprised by today.

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post #12 of 29
Quote:
Originally Posted by Galbi View Post

I'll be THAT guy again here.

Despite what Apple may claim on their earnings call, I sense that the timing of this dividend announcement to be somewhat unusual.

Normally, dividends are announced to keep the stock price's momentum. Perhaps Apple was seeing the looming lawsuits (majority of which have not had any impact) and the increased competition from competitors as an ominous sign about the future. Hence, the dividend and share buyback announcement.

Just my 0.02 cents.

I threw the bait. Hope I get a big fishy today.

Full disclosure: I'm an AAPL shareholder.

What increased competition? I'm serious. If anything, the competition is getting shittier and lagging even further behind. Every Android tablet that comes out gets a more terrible score than the last. Android fragmentation is worse than ever. iPad is cementing its dominance more and more every day. Win8 tablets? Who knows, we'll have to wait and see. But there's a good chance they'll crash and burn, or at least not perform how everyone is expecting. Phones? The only OEM thats even close to competing on a sales standpoint is Samsung. Android has proven to be a failure as far as ecosystems go. Macs are increasing in sales every quarter. The entire line will b revamped this year, which will spur momentum. Mountain Lion will increase synergy between macs and iOS devices, giving anyone with an iPhone/iPad even more incentive to get a mac. There's a strong chance we'll get a full Television this year, as well as a smaller iPad. Honestly, the skies the limit for Apple, they're looking at an insane year sales and product wise, and I wouldn't be shocked if the stock hit $700 within a couple months. They're still on an upwards trajectory with no signs of letting up, strange as that may seem, and the stock will continue to reflect that.
post #13 of 29
Quote:
Originally Posted by SpamSandwich View Post

I think he would've liked to see Apple be a success, but for him it was never completely about the money. He basically wanted to destroy his enemies and make them suffer for doubting him.

Really? Steve's motivation for making the iPod, iPhone, and iPad was to 'destroy his enemies and make them suffer'? You're more wrong than he was. Steve was and always has been completely about the product and the experience. Everything else was noise.
post #14 of 29
Quote:
Originally Posted by Slurpy View Post

Really? Steve's motivation for making the iPod, iPhone, and iPad was to 'destroy his enemies and make them suffer'? You're more wrong than he was. Steve was and always has been completely about the product and the experience. Everything else was noise.

True that

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post #15 of 29
Record/blowout iPad sales this weekend give extra insurance toward the next earnings call and after. Fundamentally, AAPL stock will have to keep rising up to get to fair value, considering not only the low current P/E, but the extremely low forward P/E's.

This isn't a rally, it's a correction! Once the stock gets corrected, then let's hopefully let the rallying begin!
post #16 of 29
Bless you Evercore.

Wait... who the hell is Evercore?
post #17 of 29
Quote:
Originally Posted by Godzilla View Post

Record/blowout iPad sales this weekend give extra insurance toward the next earnings call and after. Fundamentally, AAPL stock will have to keep rising up to get to fair value, considering not only the low current P/E, but the extremely low forward P/E's.

This isn't a rally, it's a correction! Once the stock gets corrected, then let's hopefully let the rallying begin!

You are right, this ride is far from over.
post #18 of 29
Quote:
Originally Posted by cvaldes1831 View Post

I would like to commend the writer Josh Ong for actually mentioning Cihra's StarMine rating.

Josh Ong has been quite good since he started on AI, we should have writer bios on AI.

Quote:
Originally Posted by SolipsismX View Post

$750 over the next 12 months? I'm thinking a 25% gain over a year is excessively conservative unless qualified with some data that explains a major drop in the market overall or in Apple's ability to maintain sales.

PS: Galbi is admitting he's just baiting posters to derail the thread. What does it take to send tachy to purgatory?

Well, there are far worse forums, of which I'm not a so-called "power user" (I laugh in self-derision here). But at least you guys, including the trolls, are smart, without being to smart-ass. Edit: Okay there's definitely one or two posters around that get our goat but for the most part, other than that, the intelligence level and written ability here on AI is well above average. I avoid Twitter, Facebook and most other forum/comment avenues because they're just stupid and a waste of time. And they were mean to me.

Quote:
Originally Posted by Slurpy View Post

What increased competition? I'm serious. If anything, the competition is getting shittier and lagging even further behind.

So this is what I don't get. Apple's stock decisions do not relate to lawsuits or competition (how would it?).

But also, why does Apple need to broaden their investor base? Is this move by Apple to reduce institutional holdings? Because, again, other than absolute legal obligations to shareholders, why would Tim Cook wake up one day, and say, a screw it, give 'em 45 billion dollars? Somebody fill me in.
post #19 of 29
Quote:
Originally Posted by Michael Scrip View Post

Bless you Evercore.

Wait... who the hell is Evercore?

Perhaps it's an app development company that was mistaken for a financial something something?
post #20 of 29
Quote:
Originally Posted by colinng View Post

Is the world getting better at predicting Apple's moves (dividend, stock repurchase, iPad with Retina display, iPad with LTE), or is Apple security getting lax (their plans getting leaked), or is Apple caving in to the noise?

I hope Apple doesn't release an 8" tablet just because lots of "analysts" predict that it would appeal to the budget conscious or raise the share price - usually the most innovative products catch everyone off guard and it's a surprise they do so well! I'm not sure what an 8" tablet would bring to the table. Would it really deliver a "magical" experience or would it be kind of like video on the iPod nano - a joke or a checkbox feature for the clueless or uninformed? Sorry to those out there who just can't live without video on their nanos.

On the other hand if they've done their homework, and found that 8" delivers a magical experience too, and has other benefits for consumers, then they should punish that son of a bitch exec at Samsung who leaked their info to the world. Unless that was an intentional leak. But why would Apple do that?

No, Apple is smarter than that. There's something here that belies the "caving to Wall Street" ~ that's too easy. Something else is going on. Why do they suddenly care about their shareholders? Just because Steve has relinquished the reins? Something else is going on.

Does Apple think the cash hoard will actually make Apple less productive, since it might encourage them to sit back and cruise on the cash backup?
post #21 of 29
After what was going on with Apple and it's stock performance, $750 is extremely conservative. I wouldn't be surprised to see them flying to something between $850 and $1000 by the end of the Year.
post #22 of 29
Quote:
Originally Posted by SpamSandwich View Post

I think he would've liked to see Apple be a success, but for him it was never completely about the money. He basically wanted to destroy his enemies and make them suffer for doubting him.

lol... Daddy issues.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #23 of 29
Quote:
Originally Posted by Rabbit_Coach View Post

After what was going on with Apple and it's stock performance, $750 is extremely conservative. I wouldn't be surprised to see them flying to something between $850 and $1000 by the end of the Year.

You're not a shareholder?
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #24 of 29
Quote:
Originally Posted by sunilraman View Post

So this is what I don't get. Apple's stock decisions do not relate to lawsuits or competition (how would it?).

But also, why does Apple need to broaden their investor base? Is this move by Apple to reduce institutional holdings? Because, again, other than absolute legal obligations to shareholders, why would Tim Cook wake up one day, and say, a screw it, give 'em 45 billion dollars? Somebody fill me in.


A large horde of cash makes you a target. Regardless. If you look at the numbers, there isn't much they could afford yesterday that they can't afford now. Remember, that is 45B over 3 years. Just above spitting in the pond. The officers do have an obligation to the shareholders, and if there is nothing in 'THAT' price range, returning some value to investors comes off as looking pretty responsible (yes, I know all about the MSFT dividends discussion - we'll see whether that plays here too).

Apple's stock price has always been a bit of a lark. Good news and the price drops. Mediocre, unfounded speculation and it takes off. Broadening the investor base might help to eliminate some of the quirk.

It is all very interesting, but perhaps the biggest news is that none of the decisions have been viewed by the market as failures (by the market, I mean the 'real market' not the self-aggrandizing bloggers out to complain about everyone else but fail to disclose their own track record).

With that in mind, we need to remember that Apple is undergoing some inevitable change as a company since Steve passed away. I do believe the stock price was suppressed due to the perceived uncertainty (FUD) around what would happen to Apple without Steve... So we're experiencing a bit of an upward correction as the market assesses Apple's real value.
post #25 of 29
Quote:
Originally Posted by SolipsismX View Post

$750 over the next 12 months? I'm thinking a 25% gain over a year is excessively conservative unless qualified with some data that explains a major drop in the market overall or in Apple's ability to maintain sales.



PS: Galbi is admitting he's just baiting posters to derail the thread. What does it take to send tachy to purgatory?

His post makes zero sense. As usual. Best to ignore him.
post #26 of 29
Quote:
Originally Posted by Galbi View Post

I'll be THAT guy again here.

Despite what Apple may claim on their earnings call, I sense that the timing of this dividend announcement to be somewhat unusual.

Normally, dividends are announced to keep the stock price's momentum. Perhaps Apple was seeing the looming lawsuits (majority of which have not had any impact) and the increased competition from competitors as an ominous sign about the future. Hence, the dividend and share buyback announcement.

Yep. You're absolutely right. Apple is doomed and they're only giving a dividend to hide the fact that they're doomed.

The fact that their cash horde will continue to grow, even with the dividend doesn't mean anything. The fact that they have decided that they have more cash than they can possibly use doesn't mean anything. The fact that they iPad 3 is another blow-out success doesn't mean anything.

It's all a subterfuge. They're actually bankrupt and you should sell your stock.
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Gatorguy 5/31/13
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post #27 of 29
Quote:
Originally Posted by jragosta View Post

Yep. You're absolutely right. Apple is doomed and they're only giving a dividend to hide the fact that they're doomed.

The fact that their cash horde will continue to grow, even with the dividend doesn't mean anything. The fact that they have decided that they have more cash than they can possibly use doesn't mean anything. The fact that they iPad 3 is another blow-out success doesn't mean anything.

It's all a subterfuge. They're actually bankrupt and you should sell your stock.

A dividend payout of $45 Billion over 3 years is immaterial to you? Wonder what you do for a living?

Apple paid out their dividends during the time when their stock was/is at the highest in their history. This is clearly a preventive measure in anticipation of a possible future precipitous price dip. Stock price is set partly on future expectations of companies' performance. Wall Street's huge expectations could be both a good and a bad, a double edged sword. Ride the momentum to skyrocket prices but when those expectations are not met, the reverse happens, and usually in a precipitous manner.

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #28 of 29
Quote:
Originally Posted by sunilraman View Post

Well, there are far worse forums, of which I'm not a so-called "power user" (I laugh in self-derision here). But at least you guys, including the trolls, are smart, without being to smart-ass. Edit: Okay there's definitely one or two posters around that get our goat but for the most part, other than that, the intelligence level and written ability here on AI is well above average. I avoid Twitter, Facebook and most other forum/comment avenues because they're just stupid and a waste of time. And they were mean to me.

I can't argue with that. This is a great forum with great members. The depth and range of conversation is great. I have learned more from this forum than any other I frequent and hope I have also taught someone something along the way. I guess if dealing with a few trolls is the price you pay for being a member then I'll gladly pay it.

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post #29 of 29
Quote:
Originally Posted by Galbi View Post

A dividend payout of $45 Billion over 3 years is immaterial to you? Wonder what you do for a living? .

Where did I say it was immaterial? And why do you feel that making things up is a rational way to discuss?

Now, $45 B is a lot of money, but it's not enough to change Apple's position materially. They already have $100 B and will nearly double that over the next 3-5 years.

So they'll have $150 B instead of $200 B. Hardly anything that's going to change their future.

Quote:
Originally Posted by Galbi View Post

Apple paid out their dividends during the time when their stock was/is at the highest in their history. This is clearly a preventive measure in anticipation of a possible future precipitous price dip. Stock price is set partly on future expectations of companies' performance. Wall Street's huge expectations could be both a good and a bad, a double edged sword. Ride the momentum to skyrocket prices but when those expectations are not met, the reverse happens, and usually in a precipitous manner.

Right. Apple did it to prop up their share price. Are you delusional in real life, too?
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Gatorguy 5/31/13
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