Monday, April 2, 2012

$1,000 Target On Apple Is Not New

As we highlighted on our blog back in August 2009 [Apple to $1,000], the concept has been around for over 2 years now. Back then the rumor of a tablet was circulating and the Mac was expected to continue gaining share. Instead, the iPad has taken off and offers such great functionality that it has replaced a lot of the expected new demand for the Mac. Either way though, the concept of Apple (AAPL) gaining more share of the computer market has come to fruition.

The news of the day was that analyst Brian White of Topeka Capital slapped a $1,001 price target on Apple. While this is the first official Wall Street analyst to place such a lofty target on the stock, he clearly wasn't the first mainstream analyst to shoot that high.

Not to mention the big difference between suggesting that target with the stock at $140 in the midst of a financial crisis and saying it with the stock at $600 with the S&P500 at multi year highs.

Either way, the only reason Apple hasn't already reached $1,500 is the size of the company. At a market cap approaching $600B, it just takes too many additional investors in order to push the stock that high.

Maybe that is a vote for the buyback over a dividend. The law of big numbers could be helped by a buyback that reduced the outstanding shares. Attempting at least to keep the market cap down.

Naturally missing in this analyst call is the past track record. What was he calling for at $140, $300, $450, etc.

Highlights from Brian's prediction:


  1. The Internet: Apple is going to own the mobile Internet, thanks to its big splashy move to 4G
  2. China China China: If you think the mobile Internet is going to be fantastic, wait till you see the mobile Internet in China, where 1.4 billion people fiddling with mobile devices will make it “a wonder of the tech world.” Well, Apple is there too and “well positioned to capitalize on this trend.”
  3. Your living room: Yes, Apple will own your living room too. How? With “full blown TV,” Mr. White says. More details to come.


Disclosure: Long AAPL. Please review the disclaimer page for more details. 



 

No comments: