Apple Inc. (NASDAQ: AAPL) is the Wall Street and Main Street darling loved by just about everybody. The analyst calls had gone higher and higher on price targets in March and even in April, but shares were down 10 of 11 days before the earnings report. We tracked what is a new ‘runner-up’ for a street-high price target. The official street-high price target remains the $1,001 target but it was hard to ignore a call that Apple could hit $1,650 per share by the end of 2015.
Now we have a new call from Gabelli & Co. this morning after Apple’s blow-out earnings report. Gabelli cited strong gross margin driven by lower commodity and component costs, as well as a higher mix of iPhone sales and strong sales growth in retail and Asia Pacific.
Gabelli raised its gross margin projections from the lower 40s to closer toward mid-40s and it sees favorable pricing through at least the end of 2012 in displays, NAND flash memory, DRAM, and hard disk drives. Gabelli said that the valuation remains very compelling at 5.3-times 2013 EBITDA and 9.4-times 2013 EPS estimates.
While Gabelli does not imply formal price targets in its “private market value” its PMV for 2013 is $1,180 for the stock based its 14-times forward earnings plus its mountain of cash.
In another call, Canaccord Genuity raised its price target to $775 from $740 this morning for Apple shares.
Apple shares already cost more than the bulk of its products. Maybe 1 share of Apple stock will ultimately end up costing more than the Mac computers.
JON C. OGG