Piper Jaffray: A Strong Apple Product Year in 2012

| Apple Stock Watch

Piper Jaffray’s Gene Munster, in a note to investors on Wednesday, predicted a strong product year for Apple in 2012. Citing no major new hardware initiatives in 2011, he’s expecting an iPhone 5 and an iPad 3 to drive revenue growth in 2012. Competitive pressures could lead Apple into both lower and higher iPad price points.

In his note, obtained by The Mac Observer, Mr. Munster said, “We expect buzz around a redesigned iPhone 5 to escalate in early CY12 until Apple launches it midway through the year. The iPhone 5, along with deeper penetration of cheaper iPhone models in more price sensitive markets, should drive higher-than-expected iPhone growth into CY13. Our bull case scenario reflects CY13 iPhone revenue growth of 35 percent vs. base case growth of 18 percent.” An Apple television is still considered a potential 2012 product.

Apple moneyMr. Munster also noted that an expanded iPad lineup could address competitive pressures: “Our model currently assumes iPad 3 will simply replace iPad 2; however, if Apple expands the iPad lineup to both higher and lower price points, the new iPads could support growth well above our current estimates. Our current CY13 revenue growth estimate for the iPad is 11 percent, with the bull case at 30 percent.”

The forecast is for 24 million Macs to be sold, as a baseline, in CY13, accounting for 15 percent of revenue. Apple sold 16.7 million Macs in FY11.

The Piper Jaffray analyst has set an overweight rating and a target price of $607 based on a 15.4x CY13E EPS of $39.31.

AAPL is currently selling at US$393.59, -$2.36 for the day.

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Comments

mhikl

What a conundrum. Apple?s P/E Ratio is the envy and wonder of its competitors yet its stock price seems schizo, big time.

If it weren?t for Piper Jaffray?s Gene Munster steady musings, I?d be worried. Apple stock has moved about 60 bucks in a year yet profits, products and panache seem stuck on enviable; sort of like a broken record.

It?s like some dark force is just biding its time, ready to toss the stock to the despair levels of Amazon and RIM so it can assail the aether with ?I told you so!?

Just found my fav bedtime story that also helps me keep my chin up.
http://bullishcross.com/apple-the-most-undervalued-large-cap-stock-in-america/ By Andy M. Zaky

mhikl

I really shouldn?t discuss anything to do with the market- definitely not my strong suit.

While Apple values are something to be admired, it?s the P/E ratio that is in a muddle.

This is a topic I?d find of interest from those who can explain it for the financial challenged.

Constable Odo

If it weren?t for Piper Jaffray?s Gene Munster steady musings, I?d be worried. Apple stock has moved about 60 bucks in a year yet profits, products and panache seem stuck on enviable; sort of like a broken record.

It’s been said that Apple’s profits have already been priced in and only additional revenue from some new product will move the share price any higher.  These earnings are expected so there’s nothing for investors to get excited about.  What gets me is that there are companies stumbling all over themselves to get earnings and yet Apple continues to get the big “Ho hum” from potential investors despite doing rather brisk sales.  There seems to be a lot of investors selling off their stocks, but I have to wonder where is that money going.  If no one wants to buy Apple at $390 a share then it must not be overvalued.  It’s too expensive which is claimed all the time.  But why is Apple too expensive and yet Google isn’t?  That’s something I really don’t understand.

Daniel Harris

Really informative post. You explain each & every point very well.

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