“Shares of Apple rose Wednesday more than 1% after Needham & Co. analyst Laura Martin initiated coverage of the stock with a strong buy rating,” Kat McKerrow reports for TheStreet. “‘Shakespeare would insist that Apple should not be valued like a hardware company if its fundamentals are better than world-class content and Internet companies,’ she wrote in a research note.”
“Apple doesn’t need to release a hit gadget every year. Instead, the company just has to focus on working off what it already has: ‘sequels,'” McKerrow reports. “And when it does release a hit, sales and profits skyrocket.”
“Wall Street doesn’t know how to correctly value Apple’s stock, and it is being priced as if it were a computer hardware company, Martin wrote,” McKerrow reports. “When each of Apple’s new releases isn’t a mega-hit, shares drop. However, Martin wrote that the shares should instead be priced as if Apple were an entertainment conglomerate. Martin set a price target of $150 for Apple’s stock, but wrote that it could go as high as $180 a share, which would represent 60% upside.”
Read more in the full article here.
MacDailyNews Take: From Martin’s keyboard to Mr. Market’s ears.
Apple is like no other company on the planet. Thus, Wall Street has no category in which to place it and no other companies to which it can be compared for performance and valuation.
I 100% agree Sparkles – however Wall Street seems to have no problem valuing other companies that do not fit into a specific category, Apple’s PE should be much higher – my sense is upper management may be in question and the lack of focus at times ??
PS I’m a long term Apple shareholder
Keep dreaming… As long as there’s Tim Cook…
Analysts thinks. Oxymoron. Oxy morons?
So begins the buildup before the inevitable devaluation by a thousand poisoned pens all the while lining their pockets whether Apple goes up or down.
Obviously you haven’t read Laura Martin’s research note. Prior to her appearance as an analyst of Apple, Inc. I would have agreed with you re: “analysts thinks”. Martin seems to be be very different from the average (most all) WS analysts.
Martin is an analyst to watch. No I do not know Martin or use Needham & Co.’s services.
“Shares of Apple rose Wednesday more than 1% after Needham & Co. analyst Laura Martin initiated coverage of the stock with a strong buy rating,” Kat McKerrow reports for TheStreet.
really ? and from this are we to conclude cause or correlation ?
any reasonable person might conclude that there are a great many more factors impacting the rise or fall of a stock valuation that the opinion of a single analyst.
i really grow weary of wall street types constantly congratulating themselves on their influence and insight when most of the time they are quite far off base.
There are just two types of investors, institutional (do their own research) and retail (do little to no research outside of what they read on the internet).
Only retail traders respond to analyst research notes, ergo, AAPL’s gyrations from irrational exuberance to irrational fearer caused by retail investors that shouldn’t be allowed to invest unsupervised.
Saw some fund guy on CNBC this morning talking down (or “taking a knife” as the graphic stated) to Apple. He went on and on about how people aren’t automatically upgrading their iPhones like clockwork anymore and so he wasn’t bullish on the stock anymore. Called for $130 and was even hesitant with that.
Idiot.
CNBC is a good platform to shake off the weak hands as it has done to Tesla stock couple weeks ago, the analysts called to downgrade TSLA, and look what it is now. Don’t be fooled by those analysts guys.
Idiot now has his own MDN entry –
Apple can’t be valued as an entertainment conglomerate since it doesn’t produce any content. Could haves and should haves don’t count for anything. Apple could use a front man like Elon Musk to get investors excited. There zero excitement coming from Apple. It’s either iPhones or nothing and Wall Street is already killing off Apple’s smartphone franchise in advance.
As long as Apple continues to buy back shares I’m not going to complain about the relatively low share price. If I live long enough I may see some really large dividends when the share count is reduced. I have to look at the bright side of things. Apple actually could come out with some amazing product in the meanwhile. I’ll keep my fingers crossed. All these high price targets really leave me weary. It’s simply not going to happen with Apple running the business the way it is. The business seems so conservative, it definitely puts the big investors to sleep.
Cable TV is considered in the entertainment category. Cable TV distributes mainly television and movie content to homes and businesses. Apple facilitates a large media store called iTunes, which replaces or supplements cable TV.
Additionally, Apple’s iOS is one of the largest gaming platforms. These games can be downloaded and played on all Apple devices, including the new Apple TV. Apple also sells more music than any other platform via iTunes. They also have one of the largest music streaming services.
Some think Apple’s entertainment sales will double by 2020, which could be one-third of total revenue. So, to classify Apple as only a computer company is incomplete. Maybe something like one-third growing entertainment company, one-third growing retail company and one-third growing computer company is more appropriate. This sounds like a P/E of 20 to me.
As the price drops $2.315 again at noon PST.
To make the dividend work for you, own a (accumulated) quantity of shares and enjoy the income.
Buy and hold AAPL, forget the daily bullshit and down road the share price undoubtedly will double and continue to grow.
Apple is better than money in the bank, any day.