Why Apple is worth $150 per share

“Apple stock could hit $150 in a year, for a return of 40%, including dividends. Two Wall Street reports agreed on that point this past week, for different reasons,” Jack Hough reports for Barron’s. “One argues that a rising portion of profit is coming from services, adding to how big Apple can become. The other says Apple enjoys the long and lucrative customer relationships typical of cable companies, and so shouldn’t be priced like a mere gadget hustler.”

“Investors don’t seem to fully appreciate Apple’s ability to scale up profits from services in coming years, according to Credit Suisse analyst Kulbinder Garcha, who added the stock to his firm’s Focus List last week,” Hough reports. “Apple sells apps, music, movies, warranties, online storage, and more. Many companies do, but Apple has an ecosystem advantage.”

“A customer who pays, say, $10 a month for a terabyte of online storage is paying top dollar for a commodity product. But with Apple, they can view photos and videos across their devices without clogging up their hard drives, and new iPhone photos are added automatically,” Hough reports. “Is it worth it? Perhaps only for those who value ease over savings, but iPhone users have household incomes 45% higher than those using Android-based devices, and they spend seven times as much on mobile commerce.”

Read more in the full article here.

MacDailyNews Take: We dream of the day where AAPL is even somewhat fairly valued.

Can you say “Trillion dollar market cap?” Ahh, dreams!

6 Comments

    1. Keep in mind the $1,000 target price that can never be reached is now $142.86. Do you think they will notice as we pass that unattainable magical number later this year?

  1. Worth it to what investors? I doubt many investors would be willing to pay that much for stock in a company which Wall Street considers past its prime. The damn stock is currently being constantly downgraded even after dropping like a rock last year while the rest of the tech stocks were soaring like eagles. There isn’t one product or service Wall Street even considers valuable enough to move the stock upward. Except for trying to move ever more iPhones, Apple doesn’t seem to be doing anything else. Of course, we’ll never know if Apple doesn’t disclose it. Far too much negativity surrounds Apple for most retail investors to take a chance with the company.

  2. I’ll keep reminding the MDN crowd here of the ONE and ONLY thing that is going to get the stock to where it should be: the departure of Tim Cook!

    That and only that. Nothing else – not sales, not profits, not biggest phone company in history of the world or any of that. Only one thing. Believe me.

    If I was wrong, we wouldn’t be languishing in the $100 doldrums forever. I’m right and looking better every single day that we remain trapped by the CEO in whom Wall Street has zero confidence.

Leave a Reply to theyarealreadyamoungus Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.