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iPod Mania Continues: Broker Gives Apple Shares a $100 Price Target
by , 9:45 AM EST, November 22nd, 2004
Broker Piper Jaffray has put a $100 price target on shares of Apple, nearly double what the stock is currently trading at, notes CBS MarketWatch. The firm arrived at the lofty goal after findings from its own survey of iPod users showed that Apple has established a newfound level of brand loyalty and brand interest across its line of products.
"We believe that the remarkable satisfaction with the iPod creates a word-of-mouth wildfire that generates new customer interest in Apple products." At $100 the stock would trade at relatively inflated 37 times the broker's calendar 2006 earnings for the company. "While this multiple is a premium to the comp group, we believe it is warranted given the growth potential of the iPod and its carryover to the core Mac business."
Back in September, Piper Jaffray said it expects Apple will grow its market share in computers in computers over the next two years as a result of products like the iPod and G5 iMac. In October, the firm reiterated that iPod demand will drive interest in Apple's other products. Other firms have echoed the so-called "halo effect," of the iPod, although to date that effect has yet to be realized as Apple sold about as many Macs in the last few quarters as it did in corresponding quarters during the past couple years.
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Observer Comments
Mon Nov 22, 2004 11:08 am Subject: Irrational exuberance
Not sure what Piper Jaffray meant. $100 by end of this year or within 12 months? $100 within 12 months is possible especially if Apple sold close to 5 million iPods (instead of 3.5-4 million) and an increased unit sales of Macs for this quarter.
Mon Nov 22, 2004 2:46 pm Subject: meeting market demands
+
Whether or not Apple hits $100 per share, it's still mighty encouraging to hear a Wall Street analyst make such a statement. More encouraging still are reports that Apple's supply chain is meeting market demands. Analysts have said that Apple's going into the holiday season firing on all cylinders; let's just hope they manage to keep up with whatever product demands lie ahead.
If you read some of the associated articles on this, they also report that 50% of Apple retail sales are now through their stores.
Man, I wish I'd bought the stock when it was down at 17. I really, really considered it. Dang.
(By the way, anyone else notice the lack of trolls on this topic?)
QuoteBiff wrote:
I've noticed a lack of trolls in general for quite some time now. It may be coincidence, but I have also noticed a rather steady flow of positive news stories lately.
All of this news is like seeing a really big wave on the beach. Pretending the wave isn't there or bitching about the disdvantages of getting wet won't change things.You either grab your surfboard and ride it, or stand there complaining and end up with your face in the sand.
Or maybe it's just the halo effect finally absorbing them all, one by one...
-Ken P
It was hard to try and find a “Halo effect†last quarter, when the iMac was totally absent from the product line-up … if Apple has a steady flow of components this quarter, sales figures will jump drastically, with the combination Holiday sales-backorders from last quarter …
I just hope Apple STILL then has trouble meeting demand …
((just sold my last shares of AAPL this morning and already regretting it …)
And yes, the outlook is for $100 by 2006, as I read this morning …
"... Still, he raised his 12-month forecast from $52 to $100..." The Guardian.
The halo effect should gather momentum as more of them move from awareness to commitment stage. What I mean is the 6%, 7% should increase over time. Is a pity, the survey did not include a time factor - average time an iPod user owned iPod before he bought a Mac.
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