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JP Morgan sees shares of Apple reaching $108, believes redesigned iPhone will exceed expectations

post #1 of 21
Thread Starter 
Investment firm J.P. Morgan became the latest to increase its price target for Apple stock on Tuesday, projecting that the company will be propelled to $108 per share thanks in part to this year's anticipated "iPhone 6" launch.

9040-497-iPhone-6-iPhone-6c-010-l.png
"iPhone 6" and "iPhone 6c" concepts by Martin Hajek.


Analyst Rod Hall issued a new note to investors, a copy of which was provided to AppleInsider, to lay the case that shares of AAPL are likely to see earnings grow beyond current expectations on Wall Street. Hall anticipates that Apple has multiple new product launches in the works for late 2014, including a redesigned iPhone.

Hall's estimate is up from his previous target of $89, which has been underwater for some time. His new price target of $108 calls for Apple to reach that goal by the end of 2015.

In addition to a redesigned iPhone, Hall also expects that Apple will launch a so-called "iWatch" this fall. However, he doesn't believe that new product category would have a significant effect on the company's bottom line.

J.P. Morgan was the second investment firm to raise its price target on Apple on Tuesday, joining Needham & Company, which increased its forecast to $97. In that increase, analyst Charlie Wolf also cited an expectation that "iPhone 6" sales will be strong, but he was also impressed by the announcement of Apple's new programming language, dubbed Swift, at this month's Worldwide Developers Conference.

Other firms tracked by AppleInsider that revised their price targets upward earlier this month are Cowen & Company ($102), and RBC Capital Markets ($100). Many have been prompted to increase their targets in the face of strong gains by AAPL stock since the company's successful March quarter results, in which iPhone sales came in higher than market expectations.
post #2 of 21
$108 doesn't seem out of order. After all $110, which is equivalent to pre-split $770, is the new $705.

The $705 high water mark from Sept 2012 was against 945 million shares, giving Apple a market cap of $660 billion. For Apple to hit that high again, the stock, now with 861 million shares outstanding, would have to get to a pre-split $770, or $110 post-split. That would require only a 16.5 PE against $40 billion in trailing earnings, which is right about where Apple's fiscal 2014 earnings will lie come the end of September. So $110 is a no-brainier over the next three months. Building upon this will be the huge positive news cycle associated with the iPhone 6, which will take away the last advantage the Android vendors can claim, leaving them behind on security, OS and App Store fragmentation, hardware quality and industrial design, and lacking a worldwide network of high-end outlets to match the attraction of the Apple stores. Not to mention lagging in technology compared with Aaple advances such as 64-bit handsets, TouchID, programming language and development environment, and more.

Apple at an 18 PE against $40 billion in trailing earnings with 850 million pre-split shares (about 6 billion post-split shares) come September/October results in a stock price of $121 per share. That does not seem out of bounds in my view.
I don't care about what the ignorant masses perceive as truth. I'm concerned with the facts on the ground.
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I don't care about what the ignorant masses perceive as truth. I'm concerned with the facts on the ground.
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post #3 of 21
I am happy to read their sentiment about Apple, and the likelihood of new products. But I have total and utter disregard for their predicted stock price and timing of such price.

For far too long I have watched these analysts follow the market price up, then down, and ending up way out of line, normally behind by 7 to 10 months.

I believe it is reasonable to predict 125 - 130 by the spring of '15.
post #4 of 21

I dont agree with them on their price target, it's too low.

 

But I do agree with them on one thing, the new iPhones will exceed expectations.

post #5 of 21

I also think the iPhone 6 will be very successful.

 

It's anecdotal, but I've seen a lot people switching to Android solely for the bigger screen (they don't care much about the "openness" and other Android exclusive features). 

 

Another thing I've heard a lot is that "iPhones are easy to break", pointing out to the glass back on their 4/4S or the glass inlays on the 5/5S (which some people think exist only to make the iPhone more breakable, they don't know about radio transparency and antennas).

 

The iPhone 6 looks like it will have a completely metallic back (except for the antenna bands) and the half pipe shape around the sides of the back shell will make it structurally strong and much harder to bend. The plastic antenna bands may also act as shock absorbers as they are positioned on the corners of the device.

 

So I think that a bigger screen and better durability will be huge selling points for a non-negligable part of the market which would've otherwise switched to another platform, much more than the little details that people here are bickering about. These sales will add up to the sales of people who were going to buy an iPhone this year anyway. 

post #6 of 21

Why are all of these "notes" being released today? Looks an awful lot like collusion or stock manipulation to me (just my opinion). How does it look to the man-on-the-street investor?


Edited by SpamSandwich - 6/24/14 at 1:22pm

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #7 of 21

I hate these stupid analysts who are trying to manipulate Apple's stock price.*

 

 

 

 

 

 

 

*Except when they are trying to make the price go UP.

post #8 of 21
Quote:
Originally Posted by Jon T View Post

I am happy to read their sentiment about Apple, and the likelihood of new products. But I have total and utter disregard for their predicted stock price and timing of such price.

For far too long I have watched these analysts follow the market price up, then down, and ending up way out of line, normally behind by 7 to 10 months.

I believe it is reasonable to predict 125 - 130 by the spring of '15.


I agree with you.  Apple's share price never seems to follow analyst predictions like say Amazon, Priceline or Google which pretty much lock in on predictions.  Apple's share price can end up anywhere.  That's why I never understand the purpose of target prices for Apple except for the possibility of manipulation although even that doesn't make any sense.  Today's upgrade had no positive effect at all on Apple if that's what they were hoping to achieve.  Of course, the whole market kind of crashed so maybe it just wasn't possible.  I always wondered why opening of new Apple stores has no positive effect on Apple.  More stores should equate to more sales, or so I would think.

post #9 of 21
Uh oh. Analysts stating Apple will exceed expectations. Setting Apple up to fail. While I do think Apple will exceed expectations, it's kind of pointless to predict sales of a nonexistent product.
post #10 of 21

In just nine messages (when I started writing this), AI forum denizens' own estimates vary from "they're setting up Apple to fail" to "it'll actually hit 125-130" (the high end of the latter range putting Apple at almost $800 billion in market cap). 

 

We need an AI betting pool.

post #11 of 21

How can the iPhone 6 possibly exceed expectations if the expectation is that it will exceed expectations?

post #12 of 21
Quote:
Originally Posted by Filmantopia View Post

How can the iPhone 6 possibly exceed expectations if the expectation is that it will exceed expectations?


I nominate this for Post of the Year. 1biggrin.gif
What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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post #13 of 21
Quote:
Originally Posted by jungmark View Post

Uh oh. Analysts stating Apple will exceed expectations. Setting Apple up to fail. While I do think Apple will exceed expectations, it's kind of pointless to predict sales of a nonexistent product.

EXACTLY.
Quote:
Originally Posted by Filmantopia View Post

How can the iPhone 6 possibly exceed expectations if the expectation is that it will exceed expectations?

EXACTLY what I was going to post. It's such nonsense.
You can't spell appeal without Apple.
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You can't spell appeal without Apple.
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post #14 of 21
Two years ago, I thought Apple just had to ship a larger screened iPhone. They chose to ship a slightly enhanced 4 inch screen in the 5 and 5s. Based on the documents which emerged in the Samsung trial, Apple has come to realize that they were wrong to take this approach. I think the lack of a larger screen iPhone has hindered sales over the past two years. Finally shipping such devices will release some pent up demand and boost sales.
post #15 of 21
Quote:
Originally Posted by drwam View Post

Two years ago, I thought Apple just had to ship a larger screened iPhone. They chose to ship a slightly enhanced 4 inch screen in the 5 and 5s. Based on the documents which emerged in the Samsung trial, Apple has come to realize that they were wrong to take this approach. I think the lack of a larger screen iPhone has hindered sales over the past two years. Finally shipping such devices will release some pent up demand and boost sales.

Or maybe (big IF) Apple knew that this would be a differentiator that they could release later than the competition so that they could have a steady stream of increased sales year-to-year.
You can't spell appeal without Apple.
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You can't spell appeal without Apple.
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post #16 of 21
Quote:
Originally Posted by drwam View Post

Two years ago, I thought Apple just had to ship a larger screened iPhone. They chose to ship a slightly enhanced 4 inch screen in the 5 and 5s. Based on the documents which emerged in the Samsung trial, Apple has come to realize that they were wrong to take this approach. I think the lack of a larger screen iPhone has hindered sales over the past two years. Finally shipping such devices will release some pent up demand and boost sales.

Wrong? Hindered? Are we looking at the same iPhone numbers?
post #17 of 21
Quote:
Originally Posted by Arlor View Post

In just nine messages (when I started writing this), AI forum denizens' own estimates vary from "they're setting up Apple to fail" to "it'll actually hit 125-130" (the high end of the latter range putting Apple at almost $800 billion in market cap). 

We need an AI betting pool.

No we don't. We have the stock market. Anybody who wants to put their money where their mouth is is free to do so.
post #18 of 21
"I believe it is reasonable to predict 125 - 130 by the spring of '15"

I very much doubt that, my analysis is more conservative - the share price might hit 105 by spring and roll up and down from between about 95-105 rising to 110-120 by end of year. It all depends on the general ecomomy and of course earnings. It could hit lows back in the 90's of course based on the usual fear/greed of traders, but it should rise as a trend unless there is some bad news or earnings, if it does reach 125 it won't stay there long because profit taking will start to drive it down and then fear pushes it further before bargain hunters step back in. The normal psychological balance between buyers and sellers just like most stocks. Did you know for instance that almost every stock will trade plus and minus 50% in a given 52 week period? Thats quite nomal so all this whining about wall street manipulating it is pure drivel and the stuff of nutcases. Just ignore them. The term "Wall Street" is meaningless anyway, who do you think buys and sells these shares anyway? Think about it before you open you mouth in ignorance.

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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post #19 of 21
Quote:
Originally Posted by quinney View Post


No we don't. We have the stock market. Anybody who wants to put their money where their mouth is is free to do so.

 

Not the same thing. People buy or short stock because they think the stock will go up or down, or they buy it because they like the dividend income or like getting the annual report sent to them or whatever. You can't infer from the fact that somebody buys the stock that they think it will end up at any particular value. A betting pool, or just public predictions, would give us a scorecard to evaluate the predictions of people here. We could see whether the people here are any better than the analysts. 

post #20 of 21
Quote:
Originally Posted by RadarTheKat View Post

$108 doesn't seem out of order. After all $110, which is equivalent to pre-split $770, is the new $705.

The $705 high water mark from Sept 2012 was against 945 million shares, giving Apple a market cap of $660 billion. For Apple to hit that high again, the stock, now with 861 million shares outstanding, would have to get to a pre-split $770, or $110 post-split. That would require only a 16.5 PE against $40 billion in trailing earnings, which is right about where Apple's fiscal 2014 earnings will lie come the end of September. So $110 is a no-brainier over the next three months. Building upon this will be the huge positive news cycle associated with the iPhone 6, which will take away the last advantage the Android vendors can claim, leaving them behind on security, OS and App Store fragmentation, hardware quality and industrial design, and lacking a worldwide network of high-end outlets to match the attraction of the Apple stores. Not to mention lagging in technology compared with Aaple advances such as 64-bit handsets, TouchID, programming language and development environment, and more.

Apple at an 18 PE against $40 billion in trailing earnings with 850 million pre-split shares (about 6 billion post-split shares) come September/October results in a stock price of $121 per share. That does not seem out of bounds in my view.

The Stocks app tells me that Apple's high in 2012 is now called $100.01.

You say $110.

Hmmm……………
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
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"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
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post #21 of 21
If Hall's price target was previously $89, he's been underwater for ten years or so.

I can't understand why he should have been so incredibly pessimistic about Apple.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
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