“Apple is manufacturing a growth spurt that could send its shares more than 20% higher to $600 over the next year,” Jack Hough writes for Barron’s. “Shares of Apple… [are] up 12%, compared with a 1% rise for the S&P 500… yet they still sell for just 12 times forward earnings estimates, a discount of about 20% to the S&P 500. Four events could send them well higher over the next year.”
“First, the strong initial iPhone sales, combined with a backlog of orders for the higher-priced model, suggest Apple will report solid revenues in both its current quarter, which runs through September, and the following one. Profits should please Wall Street, too,” Hough writes. “Second, Apple has yet to announce a deal that is expected to begin offering the iPhone through China Mobile, that country’s largest wireless carrier [750 million subscribers, compared with 100 million for Verizon Wireless].”
“Third, Apple is expected to introduce an updated iPad tablet computer in time for holiday sales… Fourth, it’s not too early to begin looking forward to the iPhone 6,” Hough writes. “None of this hinges on a futuristic TV, watch, or other device that Apple isn’t currently selling.”
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