John Paczkowski

Recent Posts by John Paczkowski

Apple: $1,111 Per Share and a $1 Trillion Market Cap in the Next Year

The blowout earnings Apple reported Tuesday inspired a number of big upgrades on the company’s stock, but none so bullish as that of Topeka Capital Markets analyst Brian White.

White, who made headlines back in April by setting a $1,001 target on Apple shares, has raised that price to an even headier high: $1,111. Which is an interesting target, and not just for its numerical symmetry. As I’ve noted here before, Apple will become the world’s first trillion-dollar company when its share price hits about $1,072. So, by setting his target at $1,111 per share, White is predicting that Apple’s market cap will hit a trillion dollars sometime in 2013.

“Apple’s performance once again demonstrated how quickly Apple fever is spreading around the world, and this trend continues to drive meaningful upside in the company’s financial results,” White says. “We believe the negative vibes that have held back the stock over the past couple of weeks will now be replaced with the fear of missing the next leg up in the stock price that we are forecasting will reach $1,111 over the next year.”

$1,111.

That’s an awfully big valuation. But is it reasonable?

White contends that it is. And Apple certainly appears to be firing on all cylinders. Its gross and operating margins both set all-time records in Q2. It has sold more than 365 million iOS devices to date — 50 million in its most recent quarter. And it has already signed up more than 125 million subscribers to iCloud. Apple is a juggernaut, and there are still plenty of growth opportunities ahead of it.

Said White, “Apple is trading at just 8.1x (ex-cash) our CY13 EPS estimate, combined with our expectations for accelerated momentum over the next year with the iPhone 5, an Apple TV, an ‘iPad Mini’ and a potential relationship with China Mobile, gives us confidence that the stock has meaningful upside potential from current levels.”


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