TMO Reports - Piper Jaffray Bumps Apple Target Share Price to $103

by , 10:00 AM EST, January 13th, 2006

Piper Jaffray analyst Gene Munster, reacting to Apple's Macworld product announcements as well as the fact that the company this week surpassed his previous US$80 12-month target share price, on Friday increased his outlook to $103.

"There has been growing chatter that Apple is becoming a new representation of an 'Internet bubble stock,'" Mr. Munster wrote in his research report, a copy of which was obtained by The Mac Observer. "We believe this label is unfair and we would highlight the following as reasons why AAPL shares can appreciate to our price target of $103 by year end:

"We believe earnings will grow significantly in CY06 (>35%). While 2005 was the year of iPod growth, we believe 2006 is poised to be the year of both iPod growth and, more importantly, Mac market share gains.

"In addition to new iPods and Intel-based Macs, we expect Apple to look to new categories (ex: mobile phones, other CE entertainment devices) by late CY06."

Looking ahead to next week's earnings report, Mr. Munster expects Apple to be "fairly conservative" when it issues its guidance for the March quarter. He added that Wall Street, however, "will likely look past the conservative nature of guidance, given Apple has exceeded revenue guidance by an average of 12% for the last 3 quarters."

Mr. Munster also expects Apple to split its stock again soon, something he sees as "a mild positive." The company split its stock last February, when it was trading in a range similar to the one it is in now.

At 9:40 AM EST on Friday, Apple shares were trading for $85.77, up $1.48, or 1.75%, for the day. The stock has been on an upward trajectory since CEO Steve Jobs on Tuesday announced December quarter results that were higher than even Wall Street's expectations.

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