“Jim Cramer told the viewers of his ‘Mad Money’ TV show Tuesday [that] it may seem counterintuitive to recommend Apple (AAPL Quote) after the stock had a monster $10 move today, but this is just the beginning,” Scott Rutt reports for TheStreet.com.
“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.