“Piper Jaffray has raised its price target for Apple (AAPL) from $160 to $205. up 28% which is stunning. Apple trades at $143 now. So, a stock that is up 130% over the last year would rise another 43% from the current price,” Douglas A. McIntyre opines for 24/7 Wall St.
“The new target price is based to a large extent on an estimate by the firm that Apple will sell 45 million iPhones in calendar year 2009, at an average price of $330,” McIntyre writes.
McIntyre describes Piper Jaffray’s forecast as “nutty,” writing, “The idea that Apple will sell a third as many phones at Motorola sells now is not credible… The Apple estimate also assumes that the larger handset companies will not come out with competing phones.”
Of Piper’s 12-month price target of $205 for Apple, McIntyre writes, “No way, no how.”
Full article here.
24/7 Wall St.’s website states, “The editors of 24/7 Wall St. do not own securities in companies that they write about. Other writers may have positions in companies and these are disclosed in their articles.” Since no such disclosure is contained within McIntyre’s article, we assume McIntyre has no stake in AAPL.
We believe that McIntyre is underestimating the excellence of iPhone, the power of word-of-mouth, and Apple’s ability to expand their iPhone product line at various price points (as they did with iPod), while overestimating competitors’ abilities to copy a device with over 200 patent applications that Apple has stated they plan to vigorously defend. McIntyre also seems to be totally discounting Mac growth, future iPods, and possible unreleased, unknown products from Apple.
We have iCal’ed McIntyre’s article, which we will revisit in 12-months or if AAPL shares hit $205 before a year elapses.