Wells Fargo analyst Maynard Um has lowered his target price range for Apple's stock to reflect its value following Monday morning's 7-to-1 stock split. His new 12 month target price range is between US$86 and $93, and was between $388 and $645 last week before the stock split.
Apple's stock hits the top end of Maynard Um's adjusted target price
In a note to investors, Mr. Um said,
We are adjusting our valuation range to $86-$93 to reflect the 7-for-1 stock split (maintaining our 13-14x multiple on our split-adjusted FY2015 EPS estimate of $6.56). We believe Apple shares have benefited from strong investor sentiment driven by broader market trends and the prospect of positive news flow expected over the coming quarter, of which the share split, in our opinion, was one.
Apple's stock closed on Friday before the split at US$645.57, and opened Monday morning at $92.69.
Mr. Um expects the anticipated launch of the iPhone 6 will help drive up the company's stock price, as will the introduction of the long rumored iWatch. Neither have been confirmed yet by Apple.
Mr. Um's S$86 to $93 target price range comes with a "Market Perform" rating. Apple is currently trading at $93.14, up 0.92 (0.99%).