AAPL price crushes old record, cruises past $1,000 pre-split per-share price
Apple's stock price on Tuesday hit a new record of $143.80, eclipsing the $1,000 per share pre-split benchmark, and if it keeps pace for the rest of the week will beat the company's old market capitalization record.
At about 1:00 p.m. Eastern time, Apple eclipsed a $1,000 per share valuation corrected for the split. At $143.80 at the close of business on Tuesday, Apple sits only $3.62 away from breaking the old market capitalization record, briefly reached on Feb. 23, 2015.
Apple's market capitalization broke $700 billion on Feb. 14, and currently sits at $755.74 billion. Since the start of 2017, Apple's stock has climbed from $115.82 to Tuesday's high.
Other than some recent analysts' predictions about the future of Apple's stock price, it isn't clear what drove Tuesday's rally. AAPL outperformed the market, which rose only 0.6 percent on the day with moderate trading value.
A peak on March 20 was said to be on the strength of the next day's product releases, which turned out to be an inexpensive 9.7-inch iPad, a (Product)Red iPhone 7, and an iPhone SE with double the storage.
Analysts suggest that Apple's share price can climb far higher in fiscal year 2017. While some suggest Apple could climb to between $140 and $150 per share. UBS analyst Steven Milunovich said in a research note that Apple's Services arm is undervalued by investors, compared to other parts of the company, and between it and a "super cycle" in the fall involving the "iPhone 8," Apple could see prices greater than $155 per share.
Tuesday's all-time high follows a string of record-breaking trading days set over the past six weeks. The first record day of 2017 came on Feb. 13 when the stock hit a high of $133.29.
Shares climbed $135.01 a day later as Apple's market capitalization exceeded $700 billion for the first time since 2015.
At about 1:00 p.m. Eastern time, Apple eclipsed a $1,000 per share valuation corrected for the split. At $143.80 at the close of business on Tuesday, Apple sits only $3.62 away from breaking the old market capitalization record, briefly reached on Feb. 23, 2015.
Apple's market capitalization broke $700 billion on Feb. 14, and currently sits at $755.74 billion. Since the start of 2017, Apple's stock has climbed from $115.82 to Tuesday's high.
Other than some recent analysts' predictions about the future of Apple's stock price, it isn't clear what drove Tuesday's rally. AAPL outperformed the market, which rose only 0.6 percent on the day with moderate trading value.
A peak on March 20 was said to be on the strength of the next day's product releases, which turned out to be an inexpensive 9.7-inch iPad, a (Product)Red iPhone 7, and an iPhone SE with double the storage.
Analysts suggest that Apple's share price can climb far higher in fiscal year 2017. While some suggest Apple could climb to between $140 and $150 per share. UBS analyst Steven Milunovich said in a research note that Apple's Services arm is undervalued by investors, compared to other parts of the company, and between it and a "super cycle" in the fall involving the "iPhone 8," Apple could see prices greater than $155 per share.
Tuesday's all-time high follows a string of record-breaking trading days set over the past six weeks. The first record day of 2017 came on Feb. 13 when the stock hit a high of $133.29.
Shares climbed $135.01 a day later as Apple's market capitalization exceeded $700 billion for the first time since 2015.
Comments
You would like to think that some in the "analyst community" were starting to get Apple, but reality is likely more about anticipation of a super-exciting-new-form-factor for iPhone, and a bit of herd mentality (stock has momentum, so lets give it more...for now).
Someday, maybe, Apple's P/E (ex-cash) will get to be almost as good as Walmart's...
Typically, product companies with growth potential are valued at 4x revenues. Certainly Apple, with a history of innovation and profit dominance in each major market it enters and the potential to disrupt additional new markets with class-leading products, deserves a near 4x revenue multiple.
Service businesses, with recurring revenue streams from subscription revenue or other types of service revenue that are seen as recurring and growing, are valued at 7x revenues. This year approximately 15-20% of Apple's revenue will be software and services.
It would not, therefore, be unreasonable for the company's overall valuation relative to revenue to fall somewhere between 4-4.8x.
Apple is currently valued at 3.46x revenue.
An expansion to 4.2x would lift the stock about 20%, to approximately $175. At that price it's earnings ratio, base upon 2017 estimated earnings, would be a hair under 20x, a fair valuation relative to the 30x earnings multiple assigned to GOOGL, for example.
I think dividends will help pay for an Apple product. They don't need to offer a discount.
While I still believe AAPL is undervalued as a stock and has lot's of room to grow if it were held to the same standards as other companies, I did not detect any news directly related to this jump.
Overall, it continues to rise slowly, but surely.
It's kind of obvious that it isn't Apple doing anything radically amazing lately yet the stock is rising.
Because the big players want it that way.