Apple’s Stock at All Time High: $370

Jul 18, 2011
J. Webster
Comments Off on Apple’s Stock at All Time High: $370

Update: Apple’s stock (AAPL) has zipped past $370 and is over $374 a share.

While the rest of the market continues to drift lower, what with debit limit worries and the sovereign debt crisis in Europe, it appears iPads, iPods, and iPhones, are still selling. And will still sell no matter if the world falls apart. Also, music and videos are still selling on iTunes and will still sell. Oh yeah, and Apple sells a few computers from time to time, too.

It’s really amazing, this company, this stock, has taken a huge bite out of the rest of the market, and essentially beaten down other companies, Research in Motion specifically. This is why the stock is at an all time high and still has room to run, Apple’s cutting down companies like trees, taking more market share and making other phones or devices obsolete.

The stock’s run is not over either, as many analysts have raised their price targets to over well over $400 a share. With earnings right around the corner, most are still bullish on the stock. Shaw Wu has a price target of $460 for Apple, which might just be the street high.

Sterne Agee’s Shaw Wu also expects a beat on profit, modeling $5.95, though he’s projecting revenue slightly below the Street, at just $24.6 billion. Still, he implies his own number may be too low. “We notice that Street estimates have ratcheted higher in the past week but we are confident in AAPL’s ability to exceed heightened expectations.”

Wu notes his gross margin assumption is above consensus, at 39.8% versus 39%. Remember Apple has told the Street to expect 38%. Component costs should be favorable, he thinks. He’s modeling 17 million iPhones, 6.8 million iPads, and 3.9 million Macs.

Wu thinks the Q4 forecast “could be less conservative than usual” because “our supply chain checks indicating better availability of components and increased production capacity.” He’s modeling $27.7 billion in revenue and $6.57 in EPS. The Street is at $27.75 billion and $6.44.

Wu reiterates a Buy rating and a $460 price target.

I picture Steve Jobs with a very contented smile, stroking his cat and eating rice cakes, while Microsoft, Research in Motion, Hewlett-Packard, Dell, and Nokia fight for just a sliver of the computer and cell phone pie.

Source: Barrons

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