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Needham raises AAPL target from $620 to $750

updated 09:52 am EDT, Wed August 22, 2012

Cites continued strong sales of iPhone, iPad, Mac

Analyst Charlie Wolf at Needham & Company has substantially raised his company's target price for AAPL stock, going from $620 to $750 in the wake of Apple's continuing price rise. The company symbolically broke Microsoft's record for all-time highest valuation earlier this week with a close at $665, though it is currently trading slightly lower.

Accordingly, Wolf has created a new target price of $750 per share, anticipating strong performance of expected new and refreshed products in Apple's holiday lineup to close out the year. In a note to investors, he notes that both iPhone and iPad sales had "far exceeded" expectations, the former's performance being particularly strong in light of widespread reports that a new model is coming soon. He had previously set the $620 target price back in February.

The iPad's success in corporate and educational environments also contributed to the price, says Wolf. He credits the tablet with 17 percent of the adjusted target pricing. He gives the "halo effect" of the iOS devices on Mac and other Apple product sales credit, adding 11 percent to the projection, and says that Apple's continuing ability to generate excess cash (despite the initiation of a dividend program under CEO Tim Cook) added another 17 percent.

Wolf did not change his 2012 overall earnings estimate of $43.75 per share, nor his 2013 prediction of a $50 EPS average. He also maintained his "Buy" rating on the stock.

"The lingering risk that we see in the Apple story is that the company may no longer innovate at the same rapid pace and with the same disruption that characterized the era when Steve Jobs was at the helm," Wolf told his investors. Any deterioration of the iPhone's market share or gross margin, he cautioned, would have a serious impact on his price target.

Apple is expected to launch a new iPhone model as early as mid-September, though the company has dropped no firm hints on this. Speculation also points to a "mini iPad" type device coming soon, along with possible refreshes or updates to some Mac and iPod models.




by MacNN Staff

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Comments

  1. iphonerulez

    Dedicated MacNNer

    Joined: 11-28-08

    Wow! Considering Apple is past $650, this man is a genius. Even so, $750 may be a long time coming.

  1. gprovida

    Junior Member

    Joined: 02-14-06

    Agree on the genius assessment, we will need to see what actually is announced and how well it does. If past history is any guide it will be a blow out Christmas season Q1 2013 followed by a blow out Chinese Holiday season Q2 2013. And 750 will seem very conservative.

  1. Eldernorm

    Fresh-Faced Recruit

    Joined: 09-26-07

    Originally Posted by iphonerulezView Post

    Wow! Considering Apple is past $650, this man is a genius. Even so, $750 may be a long time coming.



    Well, that is how he keeps his record of prognostication so high. He just waits until it happened, ups or downs his number and WOW, it all starts now. LOL

    Just a thought about these anal.............yst. :-)

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