Piper Jaffray ups Apple share price target to $250 on Mac OS X Leopard, iPhone strength

“I’ve gotten ahold of Piper Jaffray’s targets for Leopard and the news is rosey, to say the least: Piper estimates Leopard will contribute $240 million to Apple’s topline in the current quarter. Piper contends that its numbers might be a bit aggressive, based on what the company tracked when Tiger was released,” Jim Goldman reports for CNBC.

“When Tiger shipped, the installed base was about 12 million users. The installed base today is more than twice that; around 23 million users. About 15% of Mac users upgraded to Tiger in its first six weeks of availability. About 66% ultimately upgraded,” Goldman reports.

Piper “says the revenue sharing is greater than what has been factored into other analysts’ target prices,” Goldman reports. “Piper is now modeling Apple to sell 3.4 million iPhones this calendar year; 12.9 million next year, and 45 million by calendar year 2009. That 2009 figure is way ahead of the rest of the Street, but that’s because Piper is anticipating average selling prices to fall significantly by then.”

“Based on the revenue sharing agreement with AT&T, Apple pockets $18 per phone per month today. The firm’s original estimate was only $6.50. By the end of calendar year 2009, because of a decline in average selling prices, the number will be around $9,” Goldman reports. “For that reason alone, Piper is raising its target to $250 from $222.”

Full article here.

26 Comments

  1. @ The person who said I am wrong

    What I mean is that the current Apple stock price takes already in consideration the future growth of the company. The PE ratio is 52, already. Apple’s got to raise their revenu and profit to have that multiple around 25, which is a “normal number”.

    Now what Piper Jaffray is saying, means that the PE ratio will get even higher, since I don’t see how Apple is gonna raise dramatically their revenue for 2009. I mean, they will grow, but not that high that fast.

    Had the guy said $250 for 2011, I would have said OK.

  2. @ installed base
    “How is 23 million “more than twice” of 12 million? Did this guy graduate from grade school?”
    I think their 23 million number is wrong. I seem to recall it being about 22 million last January and of course we’ve had a lot more Macs sold since then.

  3. Everyone is missing the point that P/E for AAPL has fundamentally changed after they changed accounting practices to split various devices such as iPhone over a two year period.

    This means that you have to factor in an extra two years’ worth of iPhone/iTV profits to the current ratios. The initial payment has already been collected but not reported.

    The PE ratio of 52 is therefore not as bad as it seems. At a rough guess, A forward PE ratio of 30-35 is probably the new 25.

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