AAPL 12-Month Price Forecasts

  • Posted: 29 May 2010 02:39 AM #16

    Back in early March I posted this cautionary note about about fantastic future share price models.

    Yet I also believe Apple will reach $500 per share while the p/e multiple remains relatively constant with today’s multiple. I do see $500 per share two to three years out from today. That will be achieved without fantastic valuations based on today’s revenue and earnings growth rates continuing in perpetuity.

         
  • Posted: 29 May 2010 02:40 AM #17

    DawnTreader - 28 May 2010 02:50 AM

    Let’s have some fun:

    I posted an updated 12-month price forecast for AAPL back in late April. Let’s go around the table for views on where AAPL will land 12 months from today. I will be revising my price forecasts as information on June quarter Mac, iPhone and iPad sales become available.

    Where do you see AAPL trading one year from today?

    It’s no secret my price range forecast begins at over $400 per share.

    I’m bringing the original post for this topic back for page two.

         
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    Posted: 29 May 2010 04:54 PM #18

    DawnTreader - 29 May 2010 05:40 AM
    DawnTreader - 28 May 2010 02:50 AM

    Let’s have some fun:

    I posted an updated 12-month price forecast for AAPL back in late April. Let’s go around the table for views on where AAPL will land 12 months from today. I will be revising my price forecasts as information on June quarter Mac, iPhone and iPad sales become available.

    Where do you see AAPL trading one year from today?

    It’s no secret my price range forecast begins at over $400 per share.

    I’m bringing the original post for this topic back for page two.

    Until I get some kind of idea about the margins, I will wait. Obviously I don’t believe $400 is doable by this time next year. :apple:

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  • Posted: 29 May 2010 05:07 PM #19

    mbeauch - 29 May 2010 07:54 PM

    Until I get some kind of idea about the margins, I will wait. Obviously I don’t believe $400 is doable by this time next year. :apple:

    Was it a rainy night in Georgia?  :wink:

    Moving from Friday’s closing price to $400 per share represents a jump in the share price of 55%. That’s below the anticipated growth in earnings per share. Why do you expect the p/e multiple to fall by this time next year?

         
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    Posted: 29 May 2010 06:17 PM #20

    I modeled a range of $340 to $510 based on 20x to 30x P/E for end of Q211.  My assumptions for current product line growth are conservative (approximately 15% growth of Mac/music/peripherals/software, 50% growth in the iPhone and 100% growth in the iPad and -5% for the iPod).  I am not assuming any new product launches between now and then.

    Based on that, $400 per share is a reasonable assumption.

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  • Posted: 29 May 2010 07:48 PM #21

    asymco - 29 May 2010 09:17 PM

    I modeled a range of $340 to $510 based on 20x to 30x P/E for end of Q211.  My assumptions for current product line growth are conservative (approximately 15% growth of Mac/music/peripherals/software, 50% growth in the iPhone and 100% growth in the iPad and -5% for the iPod).  I am not assuming any new product launches between now and then.

    Based on that, $400 per share is a reasonable assumption.

    I’d take your Mac unit estimates just a bit higher and lower expectations on the iPod. The iPod touch may be the only Apple casualty of the iPad and the continuing retail store openings should benefit the Mac.

         
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    Posted: 29 May 2010 11:44 PM #22

    DawnTreader - 29 May 2010 08:07 PM

    Was it a rainy night in Georgia?  :wink:

    Why do you expect the p/e multiple to fall by this time next year?

    DT, look at the track that the P/E has been on since late 2007. By this time next year I see our P/E around 19-21. As for the rain, it has been raining everywhere except at my house, bummer. :cry:

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  • Posted: 30 May 2010 12:56 AM #23

    mbeauch - 30 May 2010 02:44 AM
    DawnTreader - 29 May 2010 08:07 PM

    Was it a rainy night in Georgia?  :wink:

    Why do you expect the p/e multiple to fall by this time next year?

    DT, look at the track that the P/E has been on since late 2007. By this time next year I see our P/E around 19-21. As for the rain, it has been raining everywhere except at my house, bummer. :cry:

    Here’s the good news: By the end of FQ2 2011 a trailing 12-month p/e of 20 may push the company over $400. My price forecasts are based on low p/e multiples relative to the rates of earnings growth.

         
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    Posted: 30 May 2010 01:42 AM #24

    DawnTreader - 30 May 2010 03:56 AM
    mbeauch - 30 May 2010 02:44 AM
    DawnTreader - 29 May 2010 08:07 PM

    Was it a rainy night in Georgia?  :wink:

    Why do you expect the p/e multiple to fall by this time next year?

    DT, look at the track that the P/E has been on since late 2007. By this time next year I see our P/E around 19-21. As for the rain, it has been raining everywhere except at my house, bummer. :cry:

    Here’s the good news: By the end of FQ2 2011 a trailing 12-month p/e of 20 may push the company over $400. My price forecasts are based on low p/e multiples relative to the rates of earnings growth.

    I can see FY 2010 being 14.5 eps with an upside to 15ish. If 2011 gives us 20 eps, (I am very skeptical of this) then we might get close to your price target. Maybe Oct 2011 you will get your $400 target. I am curious if there is going to be another China surprise this qtr. That might make up for the ipad margin short comings. I think the ipad gets us to $3 eps for this qtr. I am very concerned about the oil spill and I think it is going to bring the market down which is going to hold AAPL in check. If we could just get back to the good old days of irrational exuberance, we could get to $400 next month. LOL

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  • Posted: 30 May 2010 03:34 PM #25

    mbeauch - 30 May 2010 04:42 AM

    I can see FY 2010 being 14.5 eps with an upside to 15ish. If 2011 gives us 20 eps, (I am very skeptical of this) then we might get close to your price target. Maybe Oct 2011 you will get your $400 target. I am curious if there is going to be another China surprise this qtr. That might make up for the ipad margin short comings. I think the ipad gets us to $3 eps for this qtr. I am very concerned about the oil spill and I think it is going to bring the market down which is going to hold AAPL in check. If we could just get back to the good old days of irrational exuberance, we could get to $400 next month. LOL

    As I posted here, I expect Apple to reach $15 in eps this fiscal year. I don’t expect the p/e multiple to fall especially as eps growth accelerates above recent the pace of the first six months of the fiscal year. We’re looking at 70% growth in eps for the fiscal year on a 50% increase in reported revenue. Relative to the eps growth rate, the p/e multiple drops relative to actual growth, further discounting the value of the stock even if the p/e multiple remains constant.

    In other words, I don’t expect the p/e multiple to drop but the effect is a relative discounting of the price to actual earnings growth meaning the estimates take into account a further discount of the share price to growth so the more eps rises with the p/e multiple remaining relatively constant the greater the increase in the fundamental value of the shares.

    As eps rises and the p/e multiple remains constant and further falls behind the actual rate of eps growth, the more support for the shares. It’s not a question of whether or not AAPL will decline even in a soft market but how much will be gained and whether or not the share price will rise relative to actual growth.

    Currently the p/e multiple reflects about 1/3 the pace of eps growth.