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iPod Mania Continues: Broker Gives Apple Shares a $100 Price Target

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.


If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:jimothy Posts: 612 Joined: 04 Jun 2004
Subject: Irrational exuberance

Ah, this all makes me nostalgic for the 90s, what about you?

Close Name:chrisdavies Posts: 1 Joined: 14 Jan 2002
Subject:

this is crazy talk!!!!! doubling the estimated share price...? Still, it makes for interesting reading!

Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject:

I do believe that Apple will reach $100 a share, but I was thinking more of, you know, in 3-6 years. Not this Christmas or anything.

Close Name:Guest
Subject: If my local Apple Store was anything to go by...

$100 per share is conservative!

Was at my local Apple Store yesterday - you would have thought it was Black Friday (the day after Thanksgiving), the store was so busy. While I was waiting to return something (took about 10 minutes), the register next to me rang up sales for 12 iPods (one woman bought 3 minis and an iPod photo), 2 iMacs and a DP Powermac.

As I was walking out, I counted 20 people on line, waiting to pay. Over half were holding iPod boxes (the store had the minis and the 20GBs out, on display).

Incredible!

Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject:

^^

Note to self: Shop online this year!

Close Name:Mace Posts: 9604 Joined: 07 Aug 2003
Subject:

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.



Last edited by Mace on Mon Nov 22, 2004 4:20 pm; edited 1 time in total
Reply | Quote
Close Name:mrmgraphics Posts: 825 Joined: 05 Sep 2003
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.

Close Name:Guest
Subject: $100 by mid-Jan

Since Piper Jaffray gave estimated earnings for FY2006, I think they are projecting the $100 target for FY2006 or next October (which is when Apple starts its FY2006).

But who knows? Given this bandwagon craziness, Apple will probably hit $100 by the middle of January - pick one:
a. just before SF Expo when speculation (video tablet?, Tiger release date?, dual 3GHz G5?, Powerbook G5?, quad-G5 XServe, Garageband-related products?, iLife '05, iPod flash?) will be wild, or
b. just after Expo when they really announce at least one incredible product, or
c. when they report iPod and Mac sales and earnings for this quarter.

Close Name:edtekker Posts: 56 Joined: 13 Dec 2002
Subject: It's working

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?)

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject: Trolls

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.

Close Name:pyxl8 Posts: 171 Joined: 24 Dec 2003
Subject: Lack of trolls

Quote
Biff 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

Close Name:jacrav Posts: 268 Joined: 04 Jul 2001
Subject: Halo effect

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 …

Close Name:Mace Posts: 9604 Joined: 07 Aug 2003
Subject:

"... 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.

Close Name:Guest
Subject: OK

My two cents:

iPod will be a great iMac G5 - iBook G4 seller, not as much a pro seller.

Apple desperately needs advertising iMac G5 on TV. The new Macintosh. Other than that will mean no 'halo effect' will exist. iPod itself doesn't aware anyone of Macs, especially now HP got the deal. Apple's gotta link iPod and iMac or iBook on TV and computer press to gain momentum and market share.

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