updated 09:50 am EDT, Mon October 8, 2007
Apple stock to hit $225?
Although having only broken the $160 mark on Friday, Apple's stock value may yet go as high as $225, one analyst predicts. The company will announce its fourth-quarter results on October 22nd, and revenues of $6 billion are predicted, with earnings-per-share (EPS) of $0.83; yet more optimistic appraisals suggest revenues between $6.2-6.3 billion, with $0.87 EPS. By September 30th, 2008, concensus suggests these figures may climb as high as $29.7 billion with $4.48 EPS, due to several ongoing developments.
Apple is for instance in the middle of a major upgrade cycle, having recently introduced new aluminum iMacs, a new version of iWork, and several new iPods including the iPod touch. Critically, the iPhone is only beginning its reception with the public, and Apple has recently announced that production of the device will grow from 3.6 to 4.8 million units by the end of the year, without accounting for European iPhone deals or next year's Asian introduction. Revenues for the device will only be fully realized at the end of the first two-year AT&T contracts, and the price cut from $599 to $399 has been drawing in customers that might not otherwise have ventured near.
The new iPods have been generating positive reviews, the Seeking Alpha analyst says, and the installed base is now over 110 million. Neither are the units eating into iPhone sales, "Apple insiders" are said to claim. It is predicted meanwhile that the immediate fourth-quarter results will show that Apple is increasing revenue from its new Macs, bolstered an extra amount by the high margins of add-on software.
Arguing for a $225 price target, Seeking Alpha says that following the results announcement, a number of analysts will move their price targets to at least $200. Apple's market value may also soon eclipse that of IBM, as the latter is at $158 billion, while Apple has already grown to reach $140 billion. An overtake may happen by the beginning of 2Q 2008, and possibly earlier.