Just this morning, Derik reported that Piper Jaffray analyst Gene Munster has set his target price for shares of AAPL to $205. 24/7 Wall St. blogger Douglas McIntyre has some choice words for Munster: “No way, no how.” McIntyre calls the forecast “nutty,” and goes on to state his total disbelief that Apple will sell the requisite number of iPhones to jump the stock over that $200 mark.
Admittedly, $205 seems quite a jump for a stock that’s trading at $144 as of this post, but Apple has shown tremendous growth in the last year: at this time in 2006, shares were priced between $60 and $65. They’ve more than doubled since then, and the financial community is expecting good news from Apple’s quarterly results on Wednesday. If only there were some way of gauging whether McIntyre’s onto something…
Like, say, a Douglas McIntyre prediction from August of last year:
Bear Stearns confirmed it [sic] “outperform” rating on Apple today. Hard to believe.Man, I wish I’d bought Apple stock at $67 a share. Geez. Sure, the law of averages suggests that as long as McIntyre keeps saying the stock will go down, he’ll probably be right eventually, but right now, I’d say that’s a hard case to make.[…]
At $67, Apples stock is still double what it was in late 2004. It does not need much of a push to move down. It probably needs a big one to move up alot.
A “buy”. It’s a hard case to make.
I bought mine at around $18/share.
Bought 1,000 shares at $9.75 the end of 1999 when I was told Apple was on its last legs by all the people who own i-Pods today. $200+? Believe it!
If Munster is right and Apple does sell 45 million iPhones in 2009 at a $330 per phone average--assuming a similar profit percentage that they make now on that revene, Apple's P/E at $205 would be about the same as it is now (perhaps a bit lower)! (Assuming everything else remained equal--iPod sales, Mac sales, etc.).
No way, no how, eh?! We shall see . . . it all comes down to how many iPhones sell. The numbers released on Wednesday will point the direction this stock is headed in. If 500-700 k were sold that first weekend, and they've reached 2 million by now, $205 is entirely do-able. If they only sold 200 k the first weekend, and they haven't hit 1 million yet, it will drop hard.
I don't know. I'm with McIntyre on this one, although not as harshly, in thinking that Munster has somewhat lost the plot. Do I really see Apple selling 45-million iPhones at their current cost during 2009? Frankly, no. Of course the key aspect of this is "at their current cost". During the coming years it's almost certain that new iPhone models will be released in much the same way as different iPods were released to cater to different sections of the market, plus the cost of production will most likely decrease as volume increases. Given this its all very hard to predict what the situation will be like in 2009 but I can't see Apple selling shares at over $200 each - more likely the shares will be split again to make them more accessible. What Apple's value will be like then, who knows?