Piper Jaffray: Apple Computer shares trading at a discount

“Analyst firm Piper Jaffray believes [Apple (AAPL)] stock is actually trading at a discount,” MacNN reports. “‘We believe many investors generally feel that Apple shares have a high relative valuation and, therefore, the Street remains split between those that believe shares deserve to continue to trade at a premium and those that believe shares should trade lower due to declining momentum,’ wrote Piper Jaffray senior analyst Gene Munster in a research report obtained by MacNN. ‘Apple is a unique company in that its business stretches into both hardware and software. As such, we believe a comparative valuation group should consist of Apple’s competitors in both hardware and software.'”

MacNN reports, “The analyst firm also believes the recent settlement between Apple and Creative, which resulted in a one-time $100 million payment to Creative to resolve outstanding lawsuits, is a ‘drop in the bucket’ to relieve possible worries about future injunctions or appeals in court.”

More in the full article here.

Related articles:
Creative Tech shares surge in early trading, Apple also up – August 24, 2006
Apple & Creative settle: Apple pays $100M for ‘Zen’ patent, Creative plans iPod accessories – August 23, 2006


  1. Think about it, which stock has the potential to go up by 1000%?

    Apple or Audible?

    Apple is valued at 56 Billion
    Audible is valued at 171 Million. ( 1billion divided by 5 to 6 )

    The recent decline in Audible’s stock is due to fears that Apple will release better versions of book reading voices, however what everyone does not realize is, machines will never be able to read a book like a human could. which will give Audible.com the edge.

  2. I believe that given the options risk and lack of iPod introductions, the current price is only undervalued by perhaps 3-5 points (still 5-8%).

    I’d like to see the stock at $75 post next-generation iPod announcement.

  3. “I believe that given the options risk and lack of iPod introductions, the current price is only undervalued by perhaps 3-5 points (still 5-8%).”

    If you are long on AAPL, neither of these will be a factor. Only good info if you are looking for a quick in and out.

  4. Keep in mind that on the Macintosh side of the business, Apple has such a small share of the market and such superiority of product — and is being recognized for that — that explosive growth is possible by taking market share from the competition. The vendors will happily supply Apple as their Windows PC competitor’s business atrophies. So there is not the usual need for vast sums of capital to fund the vendors to support Apple’s growing Macintosh market.

    There will be rough spots, such as the reported difficulty in producing enough MacBooks to satisfy demand. But blame Apple for low balling their estimates of demand. It will take some time to qualify production lines switching over to producing parts for and assembling the new Macs – perhaps in facilities that once produced boxes for Dell. But it will go far quicker than if whole new factories had to be built.

    So do not preclude Apple’s rapidly conquering a huge part of the PC market. It is very possible.

  5. Yeah, right… we all know where Piper Jaffray’s self interest lies. I never believe anything I hear form these guys when it comes to Apple. They are not realitic… the joys of being an institutional investor.

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