Barclay's Capital analyst Ben Reitzes has raised his 12-month price target for shares in Apple, Inc., citing the company's ever-increasing long-term prospects. In a research note to clients obtained by The Mac Observer, Mr. Reitzes said that upcoming new products, a product mix shift to higher-margin iPhones, and indications that "Momentum is building into year end" justify the higher price target.
"We believe it is prudent to start looking at Apple's longer-term prospects as the economy stabilizes and the company re-ignites its expansion into new product segments as well as new markets overseas," he wrote. "As a result, we are raising our 12-month target for Apple based on our new FY11 estimates."
The $208 price target is based on a 15x multiplier on his adjusted fiscal 2011 estimates of $11.10 in earnings per share (excluding interest income), but adding back in Apple's vast cash holdings, which he is putting at $45 per share looking forward to the next 12 months.
Part of Mr. Reitzes bullish take on Apple involves a meeting he recently had with Apple CFO Peter Oppenheimer, vice presidents Greg Joswiak and Eddy Cue. He said that the executives were, "optimistic regarding Apple's market positions and upbeat about the new product pipeline (without divulging any major details of course)."
In addition, he is expecting new iPods in the Fall, an Apple tablet that will be the company's "answer to a netbook," which he expects in the December quarter at the earliest, and like;y the first half of 2010, and a " further repositioning of the Mac line-up," which he believes will begin in the December quarter.
Mr. Reitzes maintained his "Overweight" rating on the stock, which compares to a sector rating of "Neutral."
AAPL was trading higher in Thursday's late-afternoon session, at $168.34 per share, a gain of $3.03 (+1.83%), in moderate volume.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.