With AAPL currently trading at $168.58, now may just be the right time to buy as Credit Suisse has set a target price of $200.
Credit Suisse has recently began coverage of AAPL, delegating an Outperform rating and $200 target price. There are a number of key components that may allow Apple to grow at a prodigious rate, breaching current macroeconomic conditions.
“Key factors are enabling Mac momentum to defy macro conditions. We believe Mac performance is due to several unique drivers that were not present in prior downturns. We anticipate that Apple will continue to grow at a multiple of the overall market for many years to come.”
Additionally, Credit Suisse maintains that iPhones will leverage more profits for Apple than previously predicted, due to the transition from a revenue sharing model to a subsidy-based model.
“iPhone economics have changed for the better. We provide a comparative analysis of the old, revenue sharing iPhone business model and the new, subsidy-based model. After considering the economic costs of iPhone unlocking, we find that the new business model is likely to be far more profitable for Apple over the long term.”
Apple’s fair value may equate to a multiple of 30X the 2009 Earnings Per Share (EPS).
“We believe Apple’s valuation is set to expand and we would be buyers of the stock. Our 12-month target price of $200 equates to a P/E multiple of 30 times our calendar 2009 EPS estimate of $6.66, which is about in line with the stock’s one-year average, but still below historical levels.”
[via ClusterStock]
