AAPL: Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon

Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon
by Adam Levine-Weinberg

Brian White has become somewhat notorious over the past year as Apple's (AAPL) most bullish analyst. Back in April, White took the audacious step of setting a $1,111 price target on the shares. Apple shares have traded in a rough range of $525-$705 since that time, so the $1,111 price target assumes that the stock will (approximately) double in the next year. As I will discuss below, by viewing Apple as a growth company and assigning a valuation accordingly, it is not difficult to justify an $1,111 price target (which would give Apple an approximately $1 trillion market capitalization). However, it is one thing to state that Apple is worth $1 trillion, and another to claim that the market will soon come to this conclusion. Over the past few months, an increasing number of hedge fund managers and other prominent investors have made highly public bearish calls on Apple. While sell-side analysts overwhelmingly have "buy" ratings on Apple, the investment community as a whole is not about to accord Apple a 20X earnings multiple. As a result, the stock price is likely to appreciate in proportion to earnings growth. read more »

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