updated 09:45 am EDT, Tue October 23, 2007
Analyst: Stock to hit $210
Apple stock may well be capable of achieving a $210 price point as a result of Monday's Q3 results, says Shaw Wu of American Technology Research. Breaking down results, Wu notes that Apple brought in $6.2 billion in revenue, generating $1.01 in EPS, surpassing concensus views of $6.1 billion and $0.86 EPS. This was driven primarily by an unexpected 200,000 extra Macs being sold, for a total of 2.2 million in the quarter; it was also aided however by 1.1 million in iPhone sales, surpassing expectations of 900,000 to 1 million. Disappointing may be iPod sales, which while still high at 10.2 million, did not go far beyond the low end of the predicted 10 to 11 million.
What may push Apple stock to $210 is Apple's new guidance for Q4 results, set at $9.2 billion with $1.42 EPS; this is drastically higher than the current consensus of $8.6 billion and $1.39. Apple has not forecast greater amounts than analysts since December 2005, and Wu believes that the company is attempting to straddle the gap between its normally conservative estimates and more optimistic visions.
AmTech predictions for FY08 now sit at $30.4 billion and $5 EPS, while FY09 may hit $34.5 billion and $5.70 EPS. The price target is being raised to $210 from $185, based on a 26x multiple of AmTech's CY08 FCF estimate of $7.50 along with $17 in net cash.