Wedbush initiates coverage of Apple stock with $405 price target

Posted:
in AAPL Investors edited January 2014
Investment firm Wedbush Securities began coverage of Apple stock on Wednesday, and kicked off its analysis with an "outperform" rating and a 12-month price target of $405.



Analyst Scott Sutherland issued a 35-page report Wednesday, in which he said he believes the investment opportunity for connected devices is larger than most people expect. With a strong early presence in the growing smartphone and tablet markets, Apple has an advantage in the mobile market that the company could use to drive adoption of other products, like Macs, the Apple TV and new cloud-based services.



"Apple's rapid emergence and dominance in mobile has turned the industry upside down," Sutherland wrote. "The control once enjoyed by mobile operators and device manufacturers is being absorbed by Apple."



Sutherland sees Apple continuing to grow the iPhone platform with the addition of a CDMA handset, allowing the company to address a potential market of 550 million CDMA subscribers. He noted that Apple's record 14.1 million phones sold last quarter represented 18 percent of all smartphone sales, but just 4 percent of all mobile phone shipments.



With the iPhone expected to arrive on the Verizon network in the U.S. in the near future, Sutherland sees the carrier selling more than 10 million of Apple's handset in 2011.







The analyst said he also believes the iPad will become a significant incremental revenue stream for Apple. He has projected sales of 14.3 million iPads in 2010 will give Apple 96 percent of the tablet market. If tablet shipments hit 45 million in 2011, he sees Apple selling 24.2 million of them, taking a 54 percent share.



"Tablet computers are coming so fast, industry estimates do not even seem to be able to keep up while Apple analysts have been trying to leapfrog one another with the most aggressive iPad estimates," he said.



Sutherland also highlighted the Apple TV as a "hobby that builds the ecosystem," calling it a business that could grow significantly in the coming years. He noted that while Apple has been successful with most media types, video has been a "weakness" for the company's iTunes service.
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Comments

  • Reply 1 of 33
    JUST initiating coverage?

    Where were they the last 4 years?
  • Reply 2 of 33
    An interesting notion - the "hobby that builds the ecosystem".



    I bought an ATV2, largely because it was cheap. My son took decided he wanted to get one also, but was thinking in terms of having a machine to act as a media server, and doesn't want to keep his MBP on all day for that. When he mentioned it to me, I thought - great idea. Now we both went out and bought Mac Minis to serve the ATV2. Now I have removed all the media from various Macs around the house, put them all on the Mini, and it is backed up by time capsule without redundantly having the same files on various machines.



    Now, granted, we were already an all Mac household. Still, 2 $99 purchases ended up with buying 2 $699 computers to go with them.



    Thank goodness this is a poor economy and we have been frugal. Otherwise Lord knows what we would have ended up getting.



    As an aside, this morning I just bought Rogue Amoeba's Airlink which lets you stream any audio (not just iTunes) eg. Pandora to the ATV2 or for that matter to the iPhone/iPad. Rogue Amoeba has a bunch of very nice low priced utilities such as this one.
  • Reply 3 of 33
    Quote:
    Originally Posted by studiomusic View Post


    JUST initiating coverage?

    Where were they the last 4 years?



    Not covering AAPL. No investment firm can cover all stocks, even the large company stocks. I've never even heard of Wedbush before. Seems to be a smaller firm.
  • Reply 4 of 33
    Pretty pedestrian observations... even by "professional analyst" (oh, an oxymoron) standards.
  • Reply 5 of 33
    I'm not an expert here, but shouldn't it be time for a stock split?
  • Reply 6 of 33
    Quote:
    Originally Posted by vexorg View Post


    Now, granted, we were already an all Mac household. Still, 2 $99 purchases ended up with buying 2 $699 computers to go with them.



    Two Apple TVs can stream from the same Mac... Only one Mac mini was necessary.
  • Reply 7 of 33
    Quote:
    Originally Posted by HahaHaha321 View Post


    I'm not an expert here, but shouldn't it be time for a stock split?



    why split?
  • Reply 8 of 33
    Quote:
    Originally Posted by OllieWallieWhiskers View Post


    why split?



    So more people can invest. I'm sure there are a ton of people out there who want to buy but don't want to pay over $300.
  • Reply 9 of 33
    Quote:
    Originally Posted by OllieWallieWhiskers View Post


    Two Apple TVs can stream from the same Mac... Only one Mac mini was necessary.



    Yes, but we don't live in the same house. The kid is off at college.
  • Reply 10 of 33
    Quote:
    Originally Posted by vexorg View Post


    Yes, but we don't live in the same house. The kid is off at college.



    ah. i see. that makes things all clear!
  • Reply 11 of 33
    Quote:
    Originally Posted by HahaHaha321 View Post


    So more people can invest. I'm sure there are a ton of people out there who want to buy but don't want to pay over $300.



    There are a huge number of people who are kicking themselves for not having bought it when it was an $80 stock less than 2 years ago. And these same people will be kicking themselves if AAPL gets to be a $400 stock.



    You can still buy a $300 stock, you just buy less shares. If you would normally buy say 200 shares of a $100 stock, you buy 80 shares of a $300 stock. It is important to position size your portfolio so you do not put too many eggs in one basket.



    Frankly I don't think there is any need for AAPL to split, but there again I'm not the one deciding.
  • Reply 12 of 33
    Quote:
    Originally Posted by studiomusic View Post


    JUST initiating coverage?

    Where were they the last 4 years?



    hiding behind the bushes, perhaps!
  • Reply 13 of 33
    Quote:
    Originally Posted by vexorg View Post


    There are a huge number of people who are kicking themselves for not having bought it when it was an $80 stock less than 2 years ago. And these same people will be kicking themselves if AAPL gets to be a $400 stock.



    You can still buy a $300 stock, you just buy less shares. If you would normally buy say 200 shares of a $100 stock, you buy 80 shares of a $300 stock. It is important to position size your portfolio so you do not put too many eggs in one basket.



    Frankly I don't think there is any need for AAPL to split, but there again I'm not the one deciding.



    I'm only kicking myself for not buying more when it bottomed out two years ago.
  • Reply 14 of 33
    macrrmacrr Posts: 488member
    Wedbush is a small brokerage company. They also let smaller hedgefunds white label their services whilst using wedbush infrastructure/back office services.



    Also- if people won't pay $300 for a winner stock.. then too bad so sad. I am glad apple is finally out of the price range of ditsy day traders and small time investors who panic at every news story.
  • Reply 15 of 33
    aiaddictaiaddict Posts: 487member
    Quote:
    Originally Posted by HahaHaha321 View Post


    So more people can invest. I'm sure there are a ton of people out there who want to buy but don't want to pay over $300.



    If you can't afford $3,000 let alone $300 you have absolutely no business buying individual company stocks. Investing turns into gambling if it is not excess money you can afford to be without for long periods if necessary, or lose altogether if things go sour.
  • Reply 16 of 33
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by HahaHaha321 View Post


    So more people can invest. I'm sure there are a ton of people out there who want to buy but don't want to pay over $300.



    You mean ... double the amount of shares "in play", thereby cutting the value of each share in half? .... hmmmm, sounds like what the feds are doing to the US $$$ .... increasing the money supply ... also known as "printing $$$ out of thin air" , thereby making each doller worth(less) ..... neither is a good "strategy" .... imho. ....
  • Reply 17 of 33
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by vexorg View Post


    You can still buy a $300 stock, you just buy less shares. If you would normally buy say 200 shares of a $100 stock, you buy 80 shares of a $300 stock. It is important to position size your portfolio so you do not put too many eggs in one basket.



    Frankly I don't think there is any need for AAPL to split, but there again I'm not the one deciding.



    So your advice to someone who cannot afford to invest $20,000.00 in Apple is to invest $24,000.00 ..... huh? .... must be "new math" ..... do you work in the banking industry, perhaps? ...
  • Reply 18 of 33
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by AIaddict View Post


    If you can't afford $3,000 let alone $300 you have absolutely no business buying individual company stocks. Investing turns into gambling if it is not excess money you can afford to be without for long periods if necessary, or lose altogether if things go sour.



    Amen to that, brother.



    Quote:
    Originally Posted by newbee View Post


    You mean ... double the amount of shares "in play", thereby cutting the value of each share in half? .... hmmmm, sounds like what the feds are doing to the US $$$ .... increasing the money supply ... also known as "printing $$$ out of thin air" , thereby making each doller worth(less) ..... neither is a good "strategy" .... imho. ....



    You are half right, but I think for the wrong reasons. When a government bank increases the money supply, the move has real economic impacts. But when a company splits shares, nothing happens to the value of anything.
  • Reply 19 of 33
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by Dr Millmoss View Post


    Amen to that, brother.







    You are half right, but I think for the wrong reasons. When a government bank increases the money supply, the move has real economic impacts. But when a company splits shares, nothing happens to the value of anything.



    Can you show me any real positive, lasting effect on the last several years of increasing the money supply. I don't see it.
  • Reply 20 of 33
    malaxmalax Posts: 1,598member
    Quote:
    Originally Posted by newbee View Post


    Can you show me any real positive, lasting effect on the last several years of increasing the money supply. I don't see it.



    He never said it was a "positive" impact.
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