Apple Analysts: Screw Everything, Everything, We're Doing $550
Evidently a 78 percent net income increase in Apple’s fiscal first quarter was all it took for the market to put aside concerns about CEO Steve Jobs’s indefinite medical leave. Analysts following the company–who, it should be noted, did a pretty lousy job of predicting Apple’s latest financials–issued a fusillade of bullish notes celebrating the company’s leviathan quarter and raising their guidance for the year ahead.
As Oppenheimer analyst Yair Reiner said in a note raising his target price on the company’s shares to $425, “It’s no surprise when Apple tops expectations, but it’s fairly rare to see it trounce Street’s targets on almost every line. Bottom line: big as Apple is, it shows no sign of slowing, not with the Verizon iPhone launching in 2Q11 and China growth accelerating to 400% year-over-year.”
Piper Jaffray analyst Gene Munster raised his price target to $483 from $438, observing in a research note that this quarter was the first in three years in which Apple issued EPS guidance above Street consensus (10 percent ahead of the Street). “Apple’s vision for itself as a mobile device company has come to fruition,” he said. “[The company] guided the March quarter more aggressively than it typically guides the out quarter relative to the Street. We see this as sign that it is bullish on the prospect of the iPhone at Verizon.”
At Deutsche Bank, Chris Whitmore slapped a price target of $440 on AAPL. “Apple continues to show impressive growth despite its size and is well positioned to benefit from the confluence of three major product cycles, namely: iPad, Macs and iPhone,” he told clients. “These product cycles coupled with greater geographic expansion (Verizon iPhone, iPad 2, iPhone 5, China expansion, Carrier deals) increases our confidence in AAPL’s ability to continue to outperform.”
At Barclays, Ben Reitzes raised his target to $450 from $420 to account for higher unit sales across Apple’s product portfolio. His take on Q1: “This very strong quarterly report left no holes to punch in the fundamental story. We believe the above-consensus revenue and EPS guidance and new products to come bring potential for further upside. We continue to believe the company is in very capable hands with COO Tim Cook and the rest of the team.”
Raising his price target to $450 from $430, Goldman Sachs analyst Bill Shope said essentially the same thing. “While the news of Steve Jobs’ medical leave may continue to add some headwinds to the share price momentum in the near-term, we continue to believe improving underlying fundamentals and the strength of Apple’s overall management team will counter this uncertainty. In addition to the strength of the December quarter and the recent Verizon iPhone release, we believe the next-gen iPad launch and the June iPhone refresh will serve as critical catalysts in the first half of 2011.”
UBS analyst Maynard Um ratcheted his price target up to $465 from $415, predicting what “could be the largest pre-order & sales ever experienced by Verizon Wireless for the iPhone” and continued success for the iPad. Said Um, “Though there has been increasing concern with regard to ramping competition, we see Apple’s ecosystem and ease of use as offering a more compelling value proposition than its competitors today and expect its tablet market share to more closely match its iPod market share in the mp3 player market rather than its share in the more fragmented smartphone market.”
And, finally, there was Ticonderoga’s Brian White, who took a “F@&k Everything, We’re Doing Five Blades” approach and raised his target price to a staggering $550. That’s about 60 percent higher than the price Apple shares have been trading at recently, a target that if the company were to hit, would value it at $506.6 billion. Said White, “Despite Monday’s news regarding Steve Jobs’s medical leave of absence, we believe it will be difficult to keep Apple’s stock from reaching new highs given the much stronger than expected quarter and outlook reported by the company.”
Bullish, or another word with a lot of the same letters? Hard to say. But as you weigh that question, remember this: This is the 33rd consecutive quarter in which Apple has beaten estimates. And this time it beat them by $2 billion.