“With Apple currently only representing 3% of cell phones and 4% of computers worldwide, Cramer said this is only the beginning of a huge move for the company. Cramer said he expects to see the iPhone dominate the cell phone market, just as the iPod did with portable MP3 players,” Rutt reports. “Apple currently commands a 70% market share in the portable music market.”
“Given the huge potential at Apple, Cramer said he’s raising his price target from $264 a share to $300 a share,” Rutt reports.
“He said investors should be willing to pay one times the growth rate for a high quality growth company like Apple,” Rutt reports. “That translates to 30 times Apple’s estimated earnings of $13 a share, or $390 a share. Cramer said since everyone would think he’s nuts to suggest $390 a share, he’s using a conservative price target of just $300 a share.”
Full article here.
$390 12 months from now is not unreasonable at all. If you think I’m nuts go look at the numbers for 2005 to 2008.
I couldn’t care less what Jim Cramer says.
Glad I already have my shares!
At least $350 by Jan 2011.
On Friday, he said that Apple would disappoint on earnings and that everyone should plan to get in on the downturn on Tuesday morning. Uh-huh. So I guess Jim bought on Friday and sold to all those same suckers/listeners on Tuesday!
But he is basically correct on the price target over, say 12-15 months.
More proof that MDN will post anything pro-Apple without comment regardless of source. How many times do we have to remind you Cramer has zero cred?? If he says $300, I think it must be time to sell!!
Cramer’s a dumb-dumb.
What kind of analyst bases his forecast on what people will think of it??
Jim Cramer’s full of partially digested coprolites.
It’s impossible for Apple to dominate the cell phone industry the way they do with mp3 players. He knows nothing about the phone market yet feels he can dish advice about it, therefore he has no credibility with me.
Apple doesn’t want to take over cell phones, they need a sizeable share of the market to grow their profits and compensate for the inevitable erosion of iPod sales over the next decade.
In a market with 1 billion sales a year, they could do that comfortably with 6-10% of the global market, which is the most they could ask for, IMO. Sure there may be bigger players but as with computers (and cell phones today for that matter), Apple will be soaking up the profits at the high end.
“What kind of analyst bases his forecast on what people will think of it??”
He is not an analyst, he is a trader. Traders do have to take into account what people think, as short term stock moves and momentum are based more on trader sentiment than on business fundamentals.
Regardless of price targets, stay long on Apple. Like, REALLY long – til 2020, if you can hold off that long.
2010-2020 will be the “Apple Decade”.
Jim Cramer is a douche bag and a documented market manipulator (don’t you watch Jon Stewart?). He’ll spread negative rumors to short-sell a stock and talk up stuff he owns to take a quick profit. He is what’s wrong with the financial sector. Can we not give him even more attention please?
@Bill
Agreed.
@Ottawa Mark
“More proof that MDN will post anything pro-Apple without comment regardless of source. How many times do we have to remind you Cramer has zero cred?? If he says $300, I think it must be time to sell!!”
No one ever needed proof of this. They post it and people can make up their own minds. And even though Cramer might have lost some credibility over the last year, if you listen to his rationale, you’ll see that it has a lot of merit. Apple has a lot of room for growth.
But go ahead and dismiss that notion just because you don’t like Cramer. The rest of us will just continue to ride this stock higher.
Cramer has his show because he is radical…and sometimes he wins.
If he is to do something radical, then he has the best chance of winning with APPL. This is the same guy that said the Blackberry Storm/Bold was the “new babe magnet” and to buy RIMM and sell AAPL. He won when RIMM split, but lost longterm. He’s a bozo and gambles with other people’s money.
The Street would push Apple off a cliff in a heartbeat on any downturn.
Look at the BS Cramer was pushing October 19:
“Your game plan next week is to buy Apple Inc. (NASDAQ:AAPL) on weakness on Tuesday morning,” Jim Cramer said on Friday’s “Mad Money” TV show. He told viewers that Apple analysts will likely be ****disappointed with the company’s earnings**** when they report on Monday, due to a little known problem with iPhone production that might keep numbers lower-than-expected. He said the glitch was taken care of at the end of the third-quarter, which will set up Apple for a solid fourth-quarter. Cramer advised viewers to act quickly and buy Apple on Tuesday before AT&T;Inc. (NYSE:T) reports on Thursday because they could follow Apple’s quarter with positive comments about the iPhone that will send Apple shares right back up. “All other data points in next week’s game plan, frankly, dwarfed by this Apple trade,” Cramer said, “and it is a trade I want you in.”
This guy is a con artist.
Cramer wants to make money.
I want Apple to make money.
I think they would split before $300 shares.
I think Cramer is a jerk.
Having said that, what he said last nite, was actually pretty lucid for him. Basically, he said he thought Apple could make $13 a share non-GAAP next year and he applied a PE, equal to the company’s growth rate, which for Apple, he said was 30. Thus, 30 times earnings of $13 non-GAAP is $390, but his target is $300.
He explained away the $90 differential down to not wanting to have people think he was crazy. Okay, maybe that’s weak, but he’s correct. If he had put a price target of $390 on Apple, people would say he’s crazy. Of course, they already think that.
Rather than shoot the messenger, even though we’d like to, let’s just look at his assumptions.
Can Apple make $13 a share next year, non-GAAP? Yes. They made $3.12 this past quarter. They made $9.61 a share this year, non-GAAP. $13 is only 35% greater than $9.61, so, it’s certainly possible.
Does Apple deserve a PE of 30? The average S&P500;company has a PE of 15. Strong growers are rewarded with higher PEs, with 30 and higher not unheard of. Certainly on the optimistic end of the spectrum.
However, even a modest PE of 20x earnings of say $13 a share would get you to $260, not counting cash of almost $40 a share, bringing you up to $300. It’s not that ridiculous if you look at the numbers, and if Apple were to launch a new product line, then who knows.
@ Anonymous
Perfectly correct and agree. What will matter most, and what this last recession taught me, is that the underlying economy needs to be more robustly on the mend.
Even though Apple has performed wonderfully over the past year, the underlying economy caused its share price to dive to 78 bucks, all the time Apple doing better and better and better. It never made sense.
“the underlying economy caused its share price to dive to 78 bucks, all the time Apple doing better and better and better. It never made sense.”
As per my earlier post, the economy did not cause the stock to dive to 78 bucks, market sentiment caused it to go to 78 bucks. With the amount of cash on hand for AAPL, there was no way any rational business analysis could have justified a $78 dollar price, even in a “depression”. It just happened that there were more people selling the stock than buying it at the time.
@quad core
one thing steve has learned from google is don’t split the stock. It does nothing for you. A high share price helps keep the traders out of the stock which leads to a more consistent upward trend as long as the fundamentals are good. Googls is in the low 500s and is not splitting. Don’t expect apple to split unroll they are at least that high. Who cares: 100 shares at 200 are worth the same as 200 shares at 100.
And what does this have to do with the topic of this story anyway?
I’m sure that AAPL will be higher than $300 pretty soon, I’m just wondering how much the dollar will have declined by then.
-jcr
Cramer isn’t the snappiest app in anyone’s app folder.