Apple, Inc. (Stock ticker: AAPL) has been on a financial tear since unveiling the iPhone in June, 2007. Exactly a year ago yesterday the stock closed at $125.09, today it hovers in the low $180’s. Within the last year, Apple’s stock price rose as high as $202.96 before it was pummeled all the way back to $119.15 on February 26, 2008. These are major swings for a company as large as Apple.
Within the last few weeks, Apple’s target share prices have been bullishly raised by a few industry analysts. Morgan Stanley said it was raising its target price for Apple shares from $185 to $210, and predicted that sales of iPhones would double in 2009 after the device went on sale at the new, lower price of $199. “We believe the market generally expects a doubling of iPhone units with the lower price point, and we believe this is realistic, if not conservative,” Morgan Stanley said.
Richard Gardner, a Citigroup analyst, increased its price target from $248 to $287, saying it expected the iPhone to ship 12 million units in the second half of this year and 23 million in 2009.
Additionally, Toni Sacconaghi, of Bernstein Research, said he thought the 10 million new iPhones would ship in 2009, but warned that the device could cannibalize iPod sales if it was sold as a pre-pay phone for $199.
Additional Thoughts: Although $287 may seem like a wildly high number, it is not. Apple is well on its way to be traded at volumes and numbers similar to Google (Stock ticker: GOOG). If we can avoid a stock split, we may just see stock prices hit numbers similar to Apple’s search engine buddy.
As far as the iPhone canibalizing iPod sales, we can’t forget that iPod models are spread out across perfect pricepoints, with perfect feature variations for those who doesn’t want to switch carriers, switch mobile phones or sign new contracts. I just bought an iPod nano for my father and he loves it!
The iPod changed the world, the mobile industry, the music industry and in conjunction with iTunes has changed all of Hollywood. Some analysts are speculating about the iPod’s long, winding road downhill as the iPhone begins to take over. While there is no doubt the iPhone has a magnifying ha-lo effect around Apple, I just don’t see the iPod (ever) dissapearing completely because the iPhone increases its dominance.
One Comment to “Apple share targets hit $287. Still relatively low.”
As long as Steve Jobs remains relatively healthy, Apple shares will rise to new heights. Investors are wise to the fact that Jobs always low balls future earnings. He loves to beat his own estimates.
I predict that Apple shares will exceed $250 by mid 2009.
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