Tuesday, May 29, 2012

1 year price target - June 1, 2013

The Braeburn group, which I am an active member of, is publishing a 1 year price target average..  This will be an average of the participants that want to participate in the PPS projection..  The following is my post within that group.

Here’s my projection…  I’m basing my numbers on a 13.5 PE assumption.  The following numbers are starting Sept 1, 2012..  The pattern that I am projecting for each quarter is for PE expansion before and after earnings, followed by compression at the 2/3 quarter mark - down to 13.5. 

13.5 PE might be conservative, but recent history has shown this to be the case, especially with the heavy manipulation by the institutional investors.. the big boys if you will.  The reason I claim manipulation is simple:

The stock ran like hell all the way up to 644 / share.. before earnings.  Then it drops to 530..  All in a short span of time.  644 = a PE of 18…  Then the stock falls all the way down to 530 for a PE of just over 12 bucks..  I don’t see the stock moving like that for any other reason than institutional investors getting involved in a big way.  Mainly because, there is absolutely nothing wrong with Apple.. With my earnings projections, I see Apple at $931.77 on June 1, 2013

Here is the earnings breakdown, quarter by quarter, beginning on Sept 1, 2012, followed by the price with a multiple of 13.5, and finally in parenthesis my quarterly earnings target.

Sept 1 - $46.24 = $624.24 (13.02)
Dec 1 -  $54.69 = $738.31 (15.50)
Mar 1 -  $63.32 = $854.82 (22.50)
Jun 1 -  $69.02 = $931.77 (18.00)

$530.12 is the "post earnings" low this quarter.. (12.9 PE) I’m saying that the same type PE compression will happen each quarter, of course it won’t happen exactly like that, but this is what I’m using as a guideline. As I write this on May 29th, we are sitting on $572.27 with a 13.94 PE ratio..  I’m using this formula for each quarter to come up with my final 1 year target of $931.77 on June 1 2013.

Additional highlights:  I’m projecting 55 million iPhones, and 33 million iPads for Q1 13…  Revenue comes in roughly at 71 b, when you add 12 million iPods and 6.5 million macs.
I’m counting on the usual catalysts that are discussed all over the web.

Mac refresh and continuing to grow at a 17% average for a full year
Continued iPad domination
An Amazing iPhone 5 rollout - (Oct 1)
China / Asia Pacific explosion.
No TV in 2013, but I believe it will happen by mid 2014..

I will post the Braeburn group average for PPS on June 1 2013, right here, just as soon as it's published. Come back around June 5th or so..

I will have my June quarter estimates up by Friday, June 29th.

I will post the Braeburn group June quarter consensus as well, when that is published..  Look for that in early July. 

Thanks for reading,
      Dennis Hildebrand

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