“Apple has prospects for high organic growth, with open-ended potential to gain share in phones, tablets, and Macs. I view Apple’s upside scenario at $910 based on about a multiple of 15x and a FY14 EPS estimate of $60.66,” Abbas writes. “I believe the biggest issues facing Apple include the risk of losing share to lower-end products and the risk of having to cut prices for key products like iPhones and iPads. I view Apple’s downside scenario at $450 based on a multiple of 7x and FY14 EPS estimate of $60.66.”
Abbas writes, “The price target of $800 is based on a forward multiple of 13x and FY14 EPS estimate of $60.66. I believe that Apple is relatively inexpensive on a P/E basis, especially given its cash position. Currently, Apple is trading at a forward multiple of 9x, well below the 5-year average of 16.7x.”
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