BofA begins AAPL coverage with $160 target
updated 10:05 am EDT, Thu August 2, 2007
BofA begins Apple coverage
Bank of America yesterday officially began covering Apple Inc. with a $160 price target on shares of the Cupertino-based company. "While we recognize we are late to the Apple party, we believe there is a significant amount of upside possible in Apple's stock for a number of reasons," wrote Bank of America analyst Scott Craig, who suggested that continued growth and share gains for the Mac as well as strong unit growth for iPods and the iPhone are potentially underestimated by investors. Taking into consideration the iPhone's "game-changing business model," Craig believes the iPhone will generate operating margins of nearly 60 percent after two years of "conservatively estimated" monthly payments from AT&T at $6 a month. The analyst predicts earnings-per-share of $3.75 in September of 2007 fiscal year, $4.35 for fiscal 2008, and $5.57 in fiscal 2009. Craig says Apple should be valued on a cash earnings-per-share basis, however, as if all iPhone revenue were recognized upon the purchase of the device, according to Barron's Online.
