iPad, Mac, iPhone growth potential seen to propel Apple stock to $375

Posted:
in AAPL Investors edited January 2014
A prominent Wall Street analyst has upped his price target for Apple stock from $280 to $375, citing stronger than expected iPad, iPhone and Mac sales, and the fact that the company remains "a small fish in three very large ponds."



On Monday, Charlie Wolf with Needham & Company issued his first valuation report on Apple since February. He upped his price target to $375, saying that the trajectory of iPad and Mac sales was "materially higher" than he forecast earlier in the year. In addition, iPhone owners appear to be upgrading faster than he had assumed.



In February, Wolf forecast that Apple would sell just 2 million iPads in 2010, and 6 million in 2011. In reality, Apple managed to sell its first 2 million iPads in under 2 months.



Now, he conceded, Apple is on track to sell more than 12 million annually before the international rollout of the iPad is even completed.



Mac sales are strong, too, on pace for 14 million in calendar 2010 -- a number more than 50 percent higher than what he had previously forecast for the year. And iPhone sales are strong as well, with Apple's struggles to meet iPhone 4 demand suggesting that customers are upgrading faster than Wolf's analysis had assumed.







And even with all of this growth, Apple still has the potential to continue moving upward, because the iPod is its only major product that truly dominates its market.



"Apple is a small fish in three very large ponds," Wolf wrote. "The company holds just a 4+% share of the personal computer market. The combined iPhone and iPod halo effects, not to mention the emerging iPad halo effect, should enable the Mac to continue to gain share in the worldwide home PC market. "The iPhone is also a small player in the smartphone market with just a 14% worldwide market share."



He continued: "Finally, while the iPad currently has the tablet market to itself, the early evidence suggests that the device is beginning to capture share from the netbook market and is invading the business market at a rate unprecedented for an Apple product."
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Comments

  • Reply 1 of 49
    dcj001dcj001 Posts: 301member
    $375 by 05/01/11 just makes sense.
  • Reply 2 of 49
    Oh how I wish I hadn't sold all my APPL stock a few years ago. Oh well, I still made a tidy profit.
  • Reply 3 of 49
    When did Apple start selling candy?
  • Reply 4 of 49
    Quote:
    Originally Posted by Trajectory View Post


    Oh how I wish I hadn't sold all my APPL stock a few years ago. Oh well, I still made a tidy profit.



    Regret and guilt. Two useless emotions...... (but keep us straight, I suppose).
  • Reply 5 of 49
    cvaldes1831cvaldes1831 Posts: 1,832member
    Quote:
    Originally Posted by Trajectory View Post


    Oh how I wish I hadn't sold all my APPL stock a few years ago. Oh well, I still made a tidy profit.



    What does Appell Petroleum have to do with this discussion?



  • Reply 6 of 49
    brucepbrucep Posts: 2,823member
    Quote:
    Originally Posted by AppleInsider View Post


    A prominent Wall Street analyst has upped his price target for Apple stock from $280 to $375, citing stronger than expected iPad, iPhone and Mac sales, and the fact that the company remains "a small fish in three very large ponds."



    On Monday, Charlie Wolf with Needham & Company issued his first valuation report on Apple since February. He upped his price target to $375, saying that the trajectory of iPad and Mac sales was "materially higher" than he forecast earlier in the year. In addition, iPhone owners appear to be upgrading faster than he had assumed.



    In February, Wolf forecast that Apple would sell just 2 million iPads in 2010, and 6 million in 2011. In reality, Apple managed to sell its first 2 million iPads in under 2 months.



    Now, he conceded, Apple is on track to sell more than 12 million annually before the international rollout of the iPad is even completed.



    Mac sales are strong, too, on pace for 14 million in calendar 2010 -- a number more than 50 percent higher than what he had previously forecast for the year. And iPhone sales are strong as well, with Apple's struggles to meet iPhone 4 demand suggesting that customers are upgrading faster than Wolf's analysis had assumed.







    And even with all of this growth, Apple still has the potential to continue moving upward, because the iPod is its only major product that truly dominates its market.



    "Apple is a small fish in three very large ponds," Wolf wrote. "The company holds just a 4+% share of the personal computer market. The combined iPhone and iPod halo effects, not to mention the emerging iPad halo effect, should enable the Mac to continue to gain share in the worldwide home PC market. "The iPhone is also a small player in the smartphone market with just a 14% worldwide market share."



    He continued: "Finally, while the iPad currently has the tablet market to itself, the early evidence suggests that the device is beginning to capture share from the netbook market and is invading the business market at a rate unprecedented for an Apple product."



    The IPAD has no halo effect.



    The ipad is an under the water switch to macOSX device .



    the ipad IS the result of all the other halos for yrs past .



    the ipad is a full blown apple computer running on full

    blown MAC OSX are a mac convert .



    ipad sales must be counted under mac computer sales.



    lines are being crossed



    every apple device in reality is a computer

    even the 160g IPOD



    just saying





    nano phone is coming



    9
  • Reply 7 of 49
    monstrositymonstrosity Posts: 2,234member
    Well hurry up about it. I have a wedding and a 7 month honeymoon to pay for.
  • Reply 8 of 49
    jazzgurujazzguru Posts: 6,435member
    Is it too late to get in?
  • Reply 9 of 49
    blastdoorblastdoor Posts: 2,648member
    The business adoption of the iPad really is huge and something that apple-haters simply cannot wrap their heads around. Android tablets won't be as popular with business because of security concerns and Windows tablets are... Windows tablets. The only potential competitor here is an HP/Palm tablet, but it will take a while for HP to gain credibility with that (if they ever can).



    Regarding halo effects -- I think there are mutually reinforcing halo effects going on at this point. Executives are now accustomed to iPhones and MacBook Pros, so the iPad doesn't seem so exotic to them. And then once iPads invade, it will make Macs more appealing, and so forth. Virtuous cycle for apple.
  • Reply 10 of 49
    kibitzerkibitzer Posts: 1,114member
    Quote:
    Originally Posted by jazzguru View Post


    Is it too late to get in?



    Buy today and if AAPL reaches Wolf's target, you'd be up 40%+ on your investment. That would be your bet.
  • Reply 11 of 49
    "Is it too late to get it?" Not at all. I think you'll regret it if you don't get in.
  • Reply 12 of 49
    justflybobjustflybob Posts: 1,337member
    Quote:
    Originally Posted by delreyjones View Post


    "Is it too late to get it?" Not at all. I think you'll regret it if you don't get in.



    Doing a little "front running", are we?
  • Reply 13 of 49
    malaxmalax Posts: 1,598member
    Quote:
    Originally Posted by jazzguru View Post


    Is it too late to get in?



    Not if this analyst's predictions are correct. On the other hand, it is possible that AAPL will be trading at half its current price a year from now. It's happened before, more than once.
  • Reply 14 of 49
    vatdorovatdoro Posts: 52member
    Quote:
    Originally Posted by jazzguru View Post


    Is it too late to get in?



    Yup. You're too late. Teams are locked. You can't play.
  • Reply 15 of 49
    xzuxzu Posts: 139member
    I don't know if I trust a financial analysis with a "fudge factor"
  • Reply 16 of 49
    Quote:
    Originally Posted by xZu View Post


    I don't know if I trust a financial analysis with a "fudge factor"



    While I would love for this to happen I am also not big on trying to predict the stock market even more so with a major midterm election about to happen where the power in congress could change hands.
  • Reply 17 of 49
    bagmanbagman Posts: 349member
    Quote:
    Originally Posted by malax View Post


    Not if this analyst's predictions are correct. On the other hand, it is possible that AAPL will be trading at half its current price a year from now. It's happened before, more than once.



    However, I'd like to think it is because of a stock split. What is the history of stock splits? Does Steve have some absolute price and PE in mind before he considers a stock split? Does Google's share price, a la no stock split, make him reluctant to do so? Also, are there enough shares voted in to declare a stock split, without having to vote some more (which would presage such an event, and often serve as a prophetic, and profitable sign)?
  • Reply 18 of 49
    jambanjamban Posts: 7member
    Quote:
    Originally Posted by xZu View Post


    I don't know if I trust a financial analysis with a "fudge factor"



    unless that analyst was also a therapist
  • Reply 19 of 49
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by Bagman View Post


    However, I'd like to think it is because of a stock split. What is the history of stock splits? Does Steve have some absolute price and PE in mind before he considers a stock split? Does Google's share price, a la no stock split, make him reluctant to do so? Also, are there enough shares voted in to declare a stock split, without having to vote some more (which would presage such an event, and often serve as a prophetic, and profitable sign)?



    Splits have zero impact on shareholder value, and zero impact on P/E. They do nothing for anyone who is capable of buying even one share. Pardon the analogy, but if you take an apple and cut it into four quarters, you have four quarters of one apple, not four apples.
  • Reply 20 of 49
    This one never grows old, does it?



    (Hail, P. T. Barnum!)



    PS: This is in reply to Dr Millmoss above.
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