Morgan Stanley analyst meets with Apple execs; finds ‘increasing confidence’ in $540 price target

“Katheryn (‘Katy’) Huberty, Morgan Stanley’s chief Apple analyst, met recently with three of Steve Jobs’ top lieutenants: Peter Oppenheimer, the money man; Ron Johnson, the former Target exec who built the Apple Stores; and Eddy Cue, the senior vice president in charge of Internet services,” Philip Elmer-DeWitt reports for Fortune.

P.E.D. reports, “Huberty came away more bullish on Apple (AAPL) than ever, judging from the note to clients she issued Thursday, with ‘increasing confidence’ in a bull case scenario in which iPhone sales grow 55% per year over the next two years, iPad sales grow 74%, Macs grow 17% and the stock hits $540, up 54% from Wednesday’s close of $349.57.”

Much more in the full article here.

[Thanks to MacDailyNews Reader “Edward W.” for the heads up.]


  1. projections are great, aapl are very undervalued now

    that said though there will be problems for aapl going higher unless Apple does some things to encourage people to buy aapl.

    for a small company say one that has a market cap of 1 billion for it to double it only needs 1 billion more in new investment. For aapl to go to 540 a share, 200 billion needs to be invested. To get billions of bucks you need big investors like mutual funds, hedge funds, pension funds (most aapl today is held by groups like that).

    That’s why I think it’s time for Apple to think of dividends as it has plenty of cash. (I’ve argued against dividends before as I think aapl’s stock GROWTH was better than the flatline dividend stocks like msft) but with aapl stalled in-spite of blockbuster results quarter after quarter (amazon, neflix have PEs of around 70 while aapl is at 16!) and the cash pile growing I think it’s time Apple consider it.

    why? because it will allow aapl to be bought by hundreds of dividend yield funds. Right now aapl can’t get on small cap listings, or mid cap or even many growth funds (as they often have cap limit and Apple is too big) and ETFs tracking Nasdaq had to relinquish millions of aapl shares due to the re-balancing. So I think aapl needs to get onto dividend fund lists. That might boost millions of shares being bought.

    To get appl to grow you need huge investors.
    the other thing Apple can do is a stock split. Buybacks I’m not too sure of (as hedge funds etc seem able to manipulate them and the stock often falls back down).

    I’m a small investor but I did make about $150,000 profit off aapl the last few years, I know many readers are much more knowledgeable about Apple stock and trading in general than me and have much more invested, so what do you all think?

  2. Why not $600 or $650? If the analysts are just going to make up fictitious numbers, why not go even higher. I think her exuberance for that lofty target price drove Apple shares down. So far analysts target price numbers have driven Apple up a grand total of about 6% for the entire year.

    Twelve months ago they gave target prices of around $370 if Apple met certain conditions which it did and Apple hasn’t touched that so I suspect they don’t have a clue about Apple’s share price value. Well, I guess as long as they give some Apple shareholders hope, many won’t just give up and sell like so many others are doing. Thanks Ms. Huberty for doing absolutely nothing for Apple shares today.

  3. The idea that “a small company say one that has a market cap of 1 billion for it to double it only needs 1 billion more in new investment” is just not the case. The price of stock is the marginal change, i.e., the price of the last share traded. It does not all have to trade at the target price.

    That said, I was wondering around a local Target this afternoon and went into the electronics section. I don’t have an iPad yet and wanted to play with one. I was a little disappointed to see the display model under glass. As I looked around to see the stock, I realized there was no stock. The only one they had was the one under glass. In the cabinet below were spaces for the different models, all empty. This was in Fort Wayne, Indiana. Not exactly prime Apple country. A very bullish sign.

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