Monday, January 31, 2011

My one year price targets for AAPL

Hello Folks,

A lot is happening in the world of Apple, and the technology sector as a whole.  The iPad has now been on sale for 10 months.  It's truly amazing how fast things move - not only at Apple, but in watching all the companies scrambling to compete with Apple - as they launch new products, then follow up with wave after wave of new innovations and upgrades to their products.

2010 was incredibly exciting.  The iPad, and the iPhone 4 dominated the gadget industry.  As my new friend at the Apple Finance Board, and keeper of the blog, Posts at Eventide Robert Paul Leitao states: The iPad accounted for over 17% of revenue, and over 46% of revenue growth in Q1.

Those are incredible numbers for a product that has been selling for such a short period of time. Barring a national disaster, or world wide crises - this stock has much room to climb.

Below are my share price targets that I have submitted to the Apple Finance Board for the AFB price target index which will be published by February 15th.  Given AFB's record in pounding the pro's quarter after quarter, this will be an index that will be watched... and heeded.

My numbers are a little more conservative then some of the early submissions that I've seen.  I have based my prices on 60% EPS growth, while maintaining a trailing PE of roughly 18 and change over the course of 1 year.

       Date            Low         High        Target

May 1, 2011       335          400            380
Aug 1, 2011       370           430           415
Nov 1, 2011       415           480           460
Feb 1, 2012       460           540           520

Just to add a little more insight -  I have AAPL recording an EPS of $25.43 for FY 2011 vs and EPS of $15.15 for FY 2010.  Those are astounding numbers, and I'm certain that Apple will hit my EPS target.  AAPL's trailing PE is 18.93 today - Jan 31, 2011.    

I would love to see a PE of 24 at least, which I believe that Apple deserves...  the question is whether or not the rest of the world will buy shares in this unbelievable dynamo of a corporation.  

Just think about the sheer logistics that it takes to launch a product, and sell just short of 15 million of them worldwide.  Supply chain, distribution, and quality.  The fact that Apple pulls this off and populations worldwide are clamoring for their products is phenomenal. (Jobs' favorite word)

Come back to my site Wednesday for my Super bowl betting predictions..
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       Dennis Hildebrand

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