Apple Target Price: $450 Per Share

  • Posted: 21 October 2010 11:43 PM

    I posted this blog entry back in late September and the conditions described in the post apply even more in the post-September earnings realities. No matter the share price gyrations leading up to and following the earnings release, I’m reiterating my call of AAPL at $450 per share by this time next year.

    Snippet: I reiterate my forecast of $100 billion in revenue for Apple in FY 2011 and via of this post I’m issuing a revised price target for AAPL of $450 per share. This target is based on anticipated FY 2011 earnings of $24 per share.

    Investors need only be patient to see a 40%+ rise in the share price in the next 12 months. Earnings will propel the share price higher and I don’t anticipate nor factor a rise in the p/e multiple to make it happen.

         
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    Posted: 21 October 2010 11:46 PM #1

    I may buy some additional common before the end of this year.  AAPL does has a lot of room to run, though market conditions remain dangerous.  Then again, lower risk is the nice thing about buy and hold.

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  • Posted: 22 October 2010 12:05 AM #2

    I rolled my Janauray $300’s out and up to April $320’s - and held some back as cash.  We are 62% invested now in April 2011’s and Jan 2012’s - tilted toward Jan 2012’s

    Reckon I’ll probably go back into some Jan 2011’s with the cash at close to the appropriate time, which I think will be after I get back from a 15 day vacation on and around the Mexican Caribbean in mid November smile - maybe a couple of weeks after that.

         
  • Posted: 22 October 2010 12:22 AM #3

    I don’t know a potential 40%+ gain in a year requires a caution people need to be patient. Danger lies in expecting too much, too soon and betting on one’s own unrealistic expectations.

         
  • Posted: 22 October 2010 12:45 AM #4

    DawnTreader - 22 October 2010 03:22 AM

    I don’t know a potential 40%+ gain in a year requires a caution people need to be patient. Danger lies in expecting too much, too soon and betting on one’s own unrealistic expectations.

    I do not think people should bet.  I do think they should be patient.  When one does a lot with options, one chooses to live with a bit more volatility.

    I do think people should invest and trade consistent with their own risk profile and self-knowledge.  We have almost as much in cash now than our AAPL accounts were worth at the end of August - we were fully invested then. We have enough time in our current positions to be patient and are no longer fully invested - 62% or so as of the close today.

    I think there will be another good run before the earnings report in January.  I plan to be fully invested for that, if it still looks that way in late November.  Some of that will be in closer in calls, but most of it will be in calls with expiration dates from 3 to 9 months after the Jan 2011 expiration date.

         
  • Posted: 22 October 2010 12:49 AM #5

    I’m hopeful the AFB won’t be filled with the same level of hyper expectations should AAPL advance ahead of earnings to the same p/e range that’s expected after earnings. A 40%+ return should be enough of a reward for hanging for a year, even if the shares trade in synch with the market or drifts sideways for a bit between earnings reports.

         
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    Posted: 22 October 2010 12:54 AM #6

    Sage advice DT, personally, if I could get 40% for a couple of years I would be one happy camper. We talked a long time ago about p/e compression, I have no problem with it because the revenues will carry the share price.

    I would still like a 10 for one stock split, then your price target could be $45, easily attained. :apple:

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  • Posted: 22 October 2010 01:26 AM #7

    DawnTreader - 22 October 2010 03:22 AM

    I don’t know a potential 40%+ gain in a year requires a caution people need to be patient. Danger lies in expecting too much, too soon and betting on one’s own unrealistic expectations.

    I am not concern about Apple as a company. Being patient with AAPL share price is certainly doable.  What concerns me is my desire not to redo Oct. 2008 (ever) again if I don’t have to.

         
  • Posted: 22 October 2010 02:34 AM #8

    alice - 22 October 2010 04:26 AM
    DawnTreader - 22 October 2010 03:22 AM

    I don’t know a potential 40%+ gain in a year requires a caution people need to be patient. Danger lies in expecting too much, too soon and betting on one’s own unrealistic expectations.

    I am not concern about Apple as a company. Being patient with AAPL share price is certainly doable.  What concerns me is my desire not to redo Oct. 2008 (ever) again if I don’t have to.

    I don’t think we’ll see a repeat of 2008. For Apple in terms of revenue growth and earnings growth, I expect to see a repeat of FY 2010.

         
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    Posted: 22 October 2010 04:08 AM #9

    Now there’s someting we can agree on! Hell, I know a math professor who is afraid of the big scary AAPL stock price. A lot of investors just don’t look at p/e. If they did, APPL would be a lot higher!

    mbeauch - 22 October 2010 03:54 AM

    I would still like a 10 for one stock split, then your price target could be $45, easily attained. :apple:

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  • Posted: 22 October 2010 04:31 AM #10

    mbeauch - 22 October 2010 03:54 AM

    I would still like a 10 for one stock split, then your price target could be $45, easily attained. :apple:

    why not just a 309 for 1 stock split and sell/trade them in the app store… grin

         
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    Posted: 22 October 2010 04:46 AM #11

    Genius! Now that’s thinking different(ly).

    Downunder - 22 October 2010 07:31 AM
    mbeauch - 22 October 2010 03:54 AM

    I would still like a 10 for one stock split, then your price target could be $45, easily attained. :apple:

    why not just a 309 for 1 stock split and sell/trade them in the app store… grin

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  • Posted: 22 October 2010 11:27 AM #12

    JDSoCal - 22 October 2010 07:46 AM

    Genius! Now that’s thinking different(ly).

    Downunder - 22 October 2010 07:31 AM
    mbeauch - 22 October 2010 03:54 AM

    I would still like a 10 for one stock split, then your price target could be $45, easily attained. :apple:

    why not just a 309 for 1 stock split and sell/trade them in the app store… grin

    The 30% distribution fee would be the highest commission on the Street.  :wink:

         
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    Posted: 23 October 2010 07:12 PM #13

    FWIW, I was at the library last weekend and if my memory serve’s me correctly (if you ask my wife she’ll tell you I checked my memory at the door), Value Line Investment Survey places a low to high price range during the next 3 to 5 years of $500 to $750 give or take.  May have to go back this weekend just to make sure, but my range listed here is close.

    The Value Line report was dated Oct 8, 2010.

         
  • Posted: 23 October 2010 09:55 PM #14

    madmaxroi - 23 October 2010 10:12 PM

    FWIW, I was at the library last weekend and if my memory serve’s me correctly (if you ask my wife she’ll tell you I checked my memory at the door), Value Line Investment Survey places a low to high price range during the next 3 to 5 years of $500 to $750 give or take.  May have to go back this weekend just to make sure, but my range listed here is close.

    The Value Line report was dated Oct 8, 2010.

    Those would be appropriate valuations based an anticipated of continued revenue and earnings growth at FY 2010 rates.

         
  • Posted: 23 October 2010 10:02 PM #15

    DawnTreader - 24 October 2010 12:55 AM
    madmaxroi - 23 October 2010 10:12 PM

    FWIW, I was at the library last weekend and if my memory serve’s me correctly (if you ask my wife she’ll tell you I checked my memory at the door), Value Line Investment Survey places a low to high price range during the next 3 to 5 years of $500 to $750 give or take.  May have to go back this weekend just to make sure, but my range listed here is close.

    The Value Line report was dated Oct 8, 2010.

    Those would be appropriate valuations based an anticipated of continued revenue and earnings growth at FY 2010 rates.

    Isn’t $500 kind of low if we are expecting $450 in 2011?