updated 09:25 am EST, Fri February 10, 2012
EPS could hit $50 in 2012, says analyst
A Mizuho Securities hire, Abhey Lamba, has started Apple coverage at his new firm with a $635 target, says Barron's. The analyst argues that Apple will continue to succeed, and that Wall Street consensus figures are probably too low, despite more intense competition. Android smartphones are mainly taking away share from Nokia and Research in Motion, not the iPhone, he notes.
He further expects the iPad to remain the bestselling tablet, despite the prospect of Windows 8 coming to the market. Windows 8 will be the first version of Windows to concentrate on a simplified touchscreen interface, although people will still be able to access a conventional desktop if needed. The tablet version of Windows 8 will support the ARM-based processors used in devices like the iPad.
For the 2012 fiscal year, meanwhile, Lamba says it is "well within the realm of possibility" that earnings per share could hit $50, although his official estimate is $43.35. He also suggests that "management is now more open toward the idea [of a dividend or stock buybacks];" a theoretical $5 billion buyback could raise EPS by 45 to 50 cents, while a dividend payment would allegedly "diversify the mix of its current investor base."