Evercore raises Apple price target to $115, predicts sales of 58M iPhones in December quarter

Posted:
in AAPL Investors edited July 2014
Expecting big things from the anticipated debuts of new iPhones and a so-called "iWatch" this fall, Evercore Partners on Wednesday increased its price target on shares of Apple to $115 -- one of the highest current forecasts on Wall Street.




Analyst Rob Cihra sees Apple stock reaching a new all-time high, blowing past its previous record of just over $100 per share post-split. The new price target was announced in a note to investors on Wednesday, a copy of which was provided to AppleInsider.

"We see Apple creating its own growth through uniquely innovative hardware+software with integrated services vs. a sea of otherwise commodity devices," Cihra wrote. He sees the company continuing to target massive consumer markets, but in the process focusing on premium markets where margins are highest.
Evercore Partners' new $115 price target for AAPL is one of the highest on Wall Street.
For this fall, Cihra sees Apple's next-generation iPhone models propelling the company to sales of 58 million units in the December quarter, which would be an increase of 14 percent from the same period a year ago. He believes consumers have pent-up demand for a so-called "iPhone 6" with larger display options.

As for the rumored "iWatch," he sees Apple selling 5 million units priced at $249 in the December quarter. Within its first year, he said he "conservatively" sees the anticipated device selling 18 million units.

To Cihra, the "iWatch" likely represents a growing theme of continuity between Apple devices. He sees a wrist-worn accessory leveraging the company's ecosystem, making the iOS platform more valuable to both users and developers.

He sees technology and services such as Touch ID, HealthKit, HomeKit, Handoff, and iCloud drive helping to further establish Apple in growing markets such as mobile commerce, high-end advertising, and location-based services.

In the nearer term, Cihra sees Apple having shipped 35 million iPhones in the just-concluded June quarter, a number that would represent 12 percent year over year growth. He said that number would put Apple ahead of rival Samsung, which has seen its smartphone sales grow just 6 percent thus far this year.

Cihra joins a number of analysts that have increased their price targets for AAPL in recent weeks, ahead of the company's upcoming July 22 June quarter earnings report. Other increases include Needham & Company ($97), Cowen & Company ($102), RBC Capital Markets ($100), and J.P. Morgan ($108).
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Comments

  • Reply 1 of 47
    solipsismxsolipsismx Posts: 19,566member
    I wonder if they would have raised it to $805 pre-split.
  • Reply 2 of 47
    It's important to remember these "price targets" are next to meaningless, but I do expect AAPL to be worth considerably more at the end of the year than it is now.
  • Reply 3 of 47
    alcstarheelalcstarheel Posts: 554member
    Those aren't high expectations or anything...
  • Reply 4 of 47
    eriamjheriamjh Posts: 1,121member
    Quote:

    Originally Posted by SolipsismX View Post



    I wonder if they would have raised it to $805 pre-split.

    Mentally, $805 seems huge, but $115 does not.  In the end, they are the same, but not.

     

    This is the road to a pre-split $1000 stock price, if you ask me.

  • Reply 5 of 47
    rogifanrogifan Posts: 10,669member
    I keep seeing these raised price targets yet the stock is stuck at $90-$93. Are we just stuck there until September when new phones are announced?
  • Reply 6 of 47
    thewhitefalconthewhitefalcon Posts: 4,453member
    Quote:
    Originally Posted by Rogifan View Post



    I keep seeing these raised price targets yet the stock is stuck at $90-$93. Are we just stuck there until September when new phones are announced?



    Only if Wall Street deems the new phone to be acceptable. And if there's a new wearable.

     

    Personally, it's shameful there aren't more iPads selling. People are idiots for buying that cheap Android garbage. I've yet to meet someone who's truly happy with an Android tablet; unless they're shilling for Samdung. Only a Surface tablet is an acceptable alternative, IMO.

  • Reply 7 of 47
    radarthekatradarthekat Posts: 3,048moderator
    Quote:
    Originally Posted by SolipsismX View Post



    I wonder if they would have raised it to $805 pre-split.

     

    The interesting bit is that both investors and analysts refer back to the wrong number when they speak of the previous high water mark in the company's valuation.  They keep talking about $705, when this no longer representative of the previous high.  Here's why:

     

    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 be 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 Apple 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.

  • Reply 8 of 47
    cwscws Posts: 59member
    What all these price targets don't seem to take into account is that the value of Apple stock is not just affected by the company's performance, but also by larger market trends. The S&P 500 and Dow are at all time highs, having risen more than 35% in the past 18 months. The average PE ratio of publicly traded stocks is pushing 20, way above historical averages, and hardly justifiable by any reasonable forecast of economic growth. What this means is that we are due for a significant correction in the price of equities, and when this correction comes, it will take Apple's stock price down with it. With the Middle East and Ukraine spiraling into total chaos, I'm surprised that the markets haven't panicked yet. For those eager to profit on Apple stock, I'd advise against going all in at this time. Keep some of your cash in reserve to buy in after the panic.
  • Reply 9 of 47
    rogifanrogifan Posts: 10,669member
    cws wrote: »
    What all these price targets don't seem to take into account is that the value of Apple stock is not just affected by the company's performance, but also by larger market trends. The S&P 500 and Dow are at all time highs, having risen more than 35% in the past 18 months. The average PE ratio of publicly traded stocks is pushing 20, way above historical averages, and hardly justifiable by any reasonable forecast of economic growth. What this means is that we are due for a significant correction in the price of equities, and when this correction comes, it will take Apple's stock price down with it. With the Middle East and Ukraine spiraling into total chaos, I'm surprised that the markets haven't panicked yet. For those eager to profit on Apple stock, I'd advise against going all in at this time. Keep some of your cash in reserve to buy in after the panic.
    Stock market is a joke right now. What supports the markets being at all time highs? Certainly not the economy or geo political events.
  • Reply 10 of 47
    aderutteraderutter Posts: 225member
    Quote:

    Originally Posted by cws View Post

    For those eager to profit on Apple stock, I'd advise against going all in at this time. Keep some of your cash in reserve to buy in after the panic.

     

    Or write put options...

  • Reply 11 of 47
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     



    Only if Wall Street deems the new phone to be acceptable. And if there's a new wearable.

     

    Personally, it's shameful there aren't more iPads selling. People are idiots for buying that cheap Android garbage. I've yet to meet someone who's truly happy with an Android tablet; unless they're shilling for Samdung. Only a Surface tablet is an acceptable alternative, IMO.


     

    I attended a conference this past weekend, and each person on either side of me had some sort of Sumsang faux-iPad device. I had my iPad "3". We were all looking at an 80+page PDF, and I was amazed how glitchy and laggy those Sumsang Andwoid devices were, while I was able to scroll and flick the document with ease on my iPad 3. Both persons had to constantly repeat gestures to get their faux iPads to respond. I wanted to ask them why in the world they chose those devices when clearly an iPad is far superior. 

  • Reply 12 of 47
    solipsismxsolipsismx Posts: 19,566member
    I wanted to ask them why in the world they chose those devices when clearly an iPad is far superior.

    In my experience, the answers seem to range from someone looking only at raw HW numbers but not understanding what performance is for a system, to price concerns, to being told by some friend or family member that Apple is just "trendy" and they all do the same thing.
  • Reply 13 of 47
    Quote:

    Originally Posted by SolipsismX View Post





    The answers seem to range from, in my experience, someone looking only at raw HW numbers but not understanding what performance is for a system, to price concerns, to being told by some friend or family member that Apple is just "trendy" and they all do the same thing.

     

    My original iPhone was far more responsive than the faux iPad clunkers my seat mates had. I was truly amazed at how terrible their devices functioned / didn't function.

  • Reply 14 of 47
    doggonedoggone Posts: 181member
    Approach $70BB revenue in a quarter will be amazing. For that though Apple will need to grow its Mac and iPad business. Macs are possible is they gradually push down the price and squeeze out the competition. iPads are interesting in that users are holding onto them almost as long as Macs. To grow that business will need new features (iTouch).
    Of course there is always the mystery new product.
  • Reply 15 of 47
    apple ][apple ][ Posts: 8,650member
    Quote:

    Originally Posted by RegurgitatedCoprolite View Post

    I attended a conference this past weekend, and each person on either side of me had some sort of Sumsang faux-iPad device. I had my iPad "3". We were all looking at an 80+page PDF, and I was amazed how glitchy and laggy those Sumsang Andwoid devices were, while I was able to scroll and flick the document with ease on my iPad 3. Both persons had to constantly repeat gestures to get their faux iPads to respond. I wanted to ask them why in the world they chose those devices when clearly an iPad is far superior. 


     

    What kind of conference was that?, because I hardly ever see any Android tablets in the wild. I am however not the least bit surprised by the glitchiness and lagginess that you describe on those garbage tablets. I believe that it is a combination of people being cheap and ignorant.

     

    I've mentioned this before, but last time I took a flight, I'd say that 90-95% of all tablet devices that I saw were iPads. If I were in a room and the majority of tablets that I saw were Android, then I would definitely have to leave that room, as I would instantly know that I'm hanging with a bad crowd, and there is nothing to be gained from those kind of people.

  • Reply 16 of 47
    radarthekatradarthekat Posts: 3,048moderator
    Quote:

    Originally Posted by SolipsismX View Post





    The answers seem to range from, in my experience, someone looking only at raw HW numbers but not understanding what performance is for a system, to price concerns, to being told by some friend or family member that Apple is just "trendy" and they all do the same thing.

     

    Agreed.  And when they evaluate on price they fail to take into account resale value, of which there is precious little for a non-iPad tablet.  It's amazing how myopic people can be.

  • Reply 17 of 47
    apple ][apple ][ Posts: 8,650member

    As for Apple's stock price and analysts.

     

    A lot of them are going to have to raise their price targets soon, because they will be underwater, and they will look like morons if they don't. They're merely playing catch up, analysts rarely predict anything accurately, they merely follow after the fact, and rather poorly too.

  • Reply 18 of 47
    Quote:

    Originally Posted by Apple ][ View Post

     

     

    What kind of conference was that?, because I hardly ever see any Android tablets in the wild. I am however not the least bit surprised by the glitchiness and lagginess that you describe on those garbage tablets. I believe that it is a combination of people being cheap and ignorant.

     

    I've mentioned this before, but last time I took a flight, I'd say that 90-95% of all tablet devices that I saw were iPads. If I were in a room and the majority of tablets that I saw were Android, then I would definitely have to leave that room, as I would instantly know that I'm hanging with a bad crowd, and there is nothing to be gained from those kind of people.


     

    This was a conference of counselors, many of whom are not tech-savvy. There were a lot of iPads around - it just so happened the folks with whom I was seated had faux iPads. Two of the six people at the head table had MacBooks, which I was happy to see, and I saw one of HP's ripoffs of the MBA, made me want to gag. 

  • Reply 20 of 47

    Why is it that when Netflix or Amazon get a single price target bump you see their stock price go up 4% the next day and yet Apple has gotten numerous bumps (from the Wall Street analysts we love to hate) over the last 6 weeks and it hasn't budged the price at all?  Does anyone have a rational explanation for that?

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