AAPL Target Price: $450 Per Share

  • Posted: 26 September 2010 09:00 PM #31

    That reminds me. Let’s not forget the revenue and earnings benefit of the Mac. Each Mac sold has a revenue value of at least 2 iPhones or iPads sold. Maintaining anywhere near 25% unit sales growth in FY 2011 as the Apple iPad devours netbook sales is a big plus for performance.

         
  • Posted: 26 September 2010 09:02 PM #32

    DawnTreader - 26 September 2010 12:20 AM

    AAPL Target Price: $450 Per Share

    My latest missive at Eventide.

    Snippet: In evaluating and forecasting Apple one must look beyond the individual product lines and look at the performance of the company as a whole. In fiscal year 2011 Apple may have a second consecutive year of 50% revenue growth and 60%+ growth in earnings per share.

    The numbers support it. I won’t deny it. We’ll see how quickly the pros revise their projections for AAPL to match the revenue, earnings and share price appreciation potential the active members of the AFB discuss everyday.

    The original topic post back for page 3.

         
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    Posted: 26 September 2010 09:11 PM #33

    Interesting discussion. I don’t see HP (or for that matter Microsoft) competing effectively against Apple. The real threat is Google - and they have almost as good a culture of innovation as Apple. And it’t not Google directly as much as it is the pace at which Google is creating new competitors for Apple through Android.

    Whether we believe Google’s numbers for Android devices or not, the fact is that they have gained significant market share in the past 12 months. Motorola was writtin off for dead before it launched its Droid devices. HTC was not even on the horizon. And you just cannot deny that Samsung has a hit on it’s hands with Galaxy S - to be able to move 2M units in the US in that short a period is success any way you look at it. And in 6 months from launch of the iPad, Samsung is ready to roll out its tablet with features/capabilities pretty close to that of iPad - granted it won’t come close to selling as many devices as the iPad, but that’s not the point. Without Android, no company would be able to enter this market in less than 12-18 months of the iPad. And just like Android did for smartphones, it could do the same for tablets.

    Having said all of that, I don’t believe it will prevent Apple from posting very strong numbers in 2011. But without Android, the numbers would have been nothing short of unreal.

    I have been looking at Jan12 options lately and have done some analysis on what the Revenue/EPS/PPS could be in that time frame. My numbers are not as aggressive as DT’s from a growth rate perspective. But even with much lower growth percentages, I get very close to $24 just one quarter after DT - i.e. Dec quarter 2011 (fiscal Q1 2012).

         
  • Posted: 26 September 2010 09:26 PM #34

    AHHA - 27 September 2010 12:11 AM

    My numbers are not as aggressive as DT’s from a growth rate perspective. But even with much lower growth percentages, I get very close to $24 just one quarter after DT - i.e. Dec quarter 2011 (fiscal Q1 2012).

    I tend to be conservative in my estimates but I can’t deny what I see. The Apple iPad is a crushing success that is shredding the netbook market. It’s caught competitors by surprise and products plans have to be revamped.

    I won’t dismiss the impact of Android handsets but to me staying power is yet to be proven and I question the scalability of the OS for tablet devices. Google has set its future on Chrome and the transition may be an awkward one. After purchase revenue opportunities are elusive for Android handset makers and just because units have been sold doesn’t mean handset makers have found a way to make the market profitable.

         
  • Posted: 26 September 2010 09:46 PM #35

    capablanca - 15 September 2010 07:58 PM

    If the world does not end and if markets were free, what should/would AAPL trade at?

    FY’11 EPS = $20.  Give it a 20x multiple and add $45 of excess cash and you get $445.  (Both the $20 EPS and $45 excess cash are in my judgment conservative numbers.)  Fundamental.

    Will we see $445 anytime soon?  It is up to Goldman Sachs, JP Morgan, their ilk, and their enablers.

         
  • Posted: 26 September 2010 10:18 PM #36

    capa, thanks for confirming for the crowd there’s no magic in my numbers.  grin

    I see the price target as reasonable and more than achievable considering the growth that will be delivered by the Apple iPad.

         
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    Posted: 26 September 2010 10:19 PM #37

    FY ‘11 earnings should destroy $20 by any metric.  $20 would actually be a bad thing for AAPL, as that would indicate sharply decelerating growth - something like 25% rev growth, 33% EPS growth.  AAPL’s P/E is a puny 22 despite 75% EPS growth this fiscal year - look out below if Apple “disappoints.”.  I would be quite concerned if Apple turned in a low-$80 billion rev FY ‘11.  I know that figure is conservative, but Let’s Not Go There(tm) LOL

    Complacency is to be avoided - AAPL shareholders should be like Apple the company - IIRC, SJ once said Apple is continually running scared.  But Android’s “ascendancy” is overstated, grossly so.  Android is merely filling the vacuum created by Symbian OS, Windows 6.5.markingtimetil7, and RIMM to a slight degree.  Get a whole truckload of cel phone manufacturers interested in a Google-backed, “free”, decently competent OS, which is also a way to compete against Apple - is it any real surprise that said truckload of manufacturers can “reengineer” for Android and flood the market with devices?

    Android is the new Symbian.  It hasn’t been shown to be actually damaging iPhone’s success or prospects.  The market is new and wide open, and the combined forces of Moto/HTC/Samsung/whoever have always collectively outsold Apple and can flood the market with millions of units in a heartbeat.  In sum: “So what.” (Note the quotes.)

    [ Edited: 26 September 2010 10:23 PM by Mav ]

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 26 September 2010 10:20 PM #38

    Here’s the basic primer on AAPL forecasting I posted back in late July at Eventide.

         
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    Posted: 27 September 2010 09:39 AM #39

    DawnTreader - 27 September 2010 01:20 AM

    Here’s the basic primer on AAPL forecasting I posted back in late July at Eventide.

    Im doing my best to share your links and info DT. Cant thank you enough for your continued work and analysis. 8)

         
  • Posted: 27 September 2010 02:40 PM #40

    $Billyall - 27 September 2010 12:39 PM
    DawnTreader - 27 September 2010 01:20 AM

    Here’s the basic primer on AAPL forecasting I posted back in late July at Eventide.

    Im doing my best to share your links and info DT. Cant thank you enough for your continued work and analysis. 8)

    Thanks for the feedback.  grin

    I eagerly await September quarter results to determine how much revenue scales faster than corporate infrastructure investments as we move into revenue activity that is four times greater than the levels of activity just four years ago. GM is is of course a concern and a ratio of great interest. But there are other ratios that have as much impact on eps such as tax rates and the pace of growth relative to revenue of G,S&A activity.

         
  • Posted: 29 September 2010 11:07 AM #41

    Every announcement about tablet competition seems like good news. 

    RIMM is ready with their iPad killer!  Sometime next year and no they can’t demo it yet, but just you wait.  H-P drops their Android tablet.  Google let’s slip that current Android software isn’t apropos for a tablet yet.  Samsung may have something Android but not this early in the quarter and it will be expensive.

    It all means that the iPad will be the only real device this holiday season.  What does this really mean, technically?  It means that when Apple came out with the iPad they introduced a quantum leap in product that just could not be “me to’d” by the competition. 

    By the time the competition is out there so will be iPad v.2.  Bottom line, Apple has at minimum an 18 month lead, will have 10’s of millions out there loaded up with apps.  Developers will be concentrating on them what brung ‘em and that will be the iPad.

         
  • Posted: 29 September 2010 11:40 AM #42

    ncgo4 - 29 September 2010 02:07 PM

    Every announcement about tablet competition seems like good news.

    Do you remember Ballmer holding up an HP tablet last January? How surreal that all seems now. And absurd. Nothing could better epitomize how totally unprepared Microsoft was for the upcoming iPad revolution.

    Now 9 months later, HP has abandoned, first Windows, then Android and purchased webOS for it’s tablets. The first serious Android tablets still haven’t been given a price or a release date. Microsoft is desperately working on delivering Windows Phone 7 to AT&T by the holidays and to Verizon next year. Its tablet OS? “Sometime next year.”

    The only thing the anti-Apple forces can hang their hat on is the incredible growth of Android in the App Phone market. The haters take that to mean that the iPad too will be drowned in a sea of Android tablet knock-offs. We’ll see. There is no need to outline to this knowledgable group the reasons why the tablet market is not like the app phone market. And I stubbornly continue contend that Apple has every intention of contesting market share in the app phone arena too.

    As I often say, the future is uncertain. But the present is clear. And presently, the iPad is winning every battle on every front. Will they win the war? Who knows. But it’s quite comforting to know that they have the best generals (Steve Jobs) and the best troops (Apple’s products) on the battle field.

    [ Edited: 29 September 2010 12:39 PM by FalKirk ]      
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    Posted: 29 September 2010 11:56 AM #43

    $Billyall - 27 September 2010 12:39 PM
    DawnTreader - 27 September 2010 01:20 AM

    Here’s the basic primer on AAPL forecasting I posted back in late July at Eventide.

    Im doing my best to share your links and info DT. Cant thank you enough for your continued work and analysis. 8)

    amen

         
  • Posted: 30 September 2010 12:54 AM #44

    omacvi - 29 September 2010 02:56 PM
    $Billyall - 27 September 2010 12:39 PM
    DawnTreader - 27 September 2010 01:20 AM

    Here’s the basic primer on AAPL forecasting I posted back in late July at Eventide.

    Im doing my best to share your links and info DT. Cant thank you enough for your continued work and analysis. 8)

    amen

    Thank you for your kind words. I’m currently working on FQ4 numbers and it’s keeping me busy tonight. As I work through the estimates, certain trends become more creel. I’ll have much to write in the AFB and at Eventide this weekend.  grin

         
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    Posted: 30 September 2010 01:54 AM #45

    Great, high-quality data and analysis to discuss on the way.  smile

    I’m not one for the spreadsheets and line-by-line analysis (I prefer back-of-the-napkin/macro/trend analysis), so all of the AFB analysts’ contributions are greatly appreciated.

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.