Canaccord Raises AAPL Target on Strong iPhone Demand

| Apple Stock Watch

Canaccord Genuity analyst Michael Walkley raised his target price for Apple’s stock Tuesday morning based on strong demand for the iPhone 4. Mr. Walkley’s US$432 target price was bumped up to $460, and he expects Apple will sell over 74 million iPhones by the end of 2011.

“Our monthly channel checks indicated continued strong sales of the iPhone 4, as it remained by far the top-selling smartphone at AT&T,” Mr. Walkley said. “Further, our checks indicated Verizon is planning for strong demand for the CDMA iPhone 4 launch scheduled for February 10 (this Thursday).”

Verizon announced it would be carrying the iPhone 4 during a special media event in January. The company offered pre-sales to its existing customers for only a few hours on February 3, and will offer pre-orders to the general public on February 9 a day ahead of the official launch.

Apple and Verizon began accepting iPhone 4 pre-orders from current Verizon customers at 3AM eastern time on the 3rd, but shut down the program in the afternoon when the available inventory had been depleted. Verizon said the first two hours of pre-orders broke all of its previous first day sales records for a single device.

Mr. Walkley expects Apple’s iPad will continue to be popular, too.

“Our checks also indicated strong sell-through trends for iPad, and we believe the iPad will sell well in C2011 despite increased competition from Android tablets such as the Xoom and other Honeycomb tablets from Samsung, LG, and others,” he said. “As such, we have increased our calendar 2011 iPad estimate from 30.3 million to 34.0 million units.”

Along with his higher target price for Apple’s stock, Mr. Walkley is also raising his EPS projections from $21.84 to $22.92 for fiscal 2011, and from $24 up to $25.60 for fiscal 2012.

Mr. Walkley’s $460 target price for Apple’s stock also includes a “Buy” rating. Apple is currently trading in at $352.70, up 0.82 (0.23%).

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Based on his earnings projections, it appears he’s using a Price-Earnings ratio in the 16-18 neighborhood. How does this compare with other tech companies and the market overall?

I’d like to see TMO include the PE ratio in these financial articles, as well as mentioning other analysts recent projections, or links to older TMO posts with such projections.


There’s yet another underlining reason to be bullish on Apple.

What’s the reason you may ask?

Well, Google’s forked Android. What does that mean?

That means that at least for the foreseeable future the smartphone Android and the tablet Android are two different OS’s. Yes, more confusion and fragmentation!

This could very well be the reason for Google’s hiring spree. There’s no way developers are going to gain enough traction on the new Android tablet OS keep up with the Apple’s iPad.

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