Moon,
A couple years back they got their Point Targets too high, up around $800. This was wrong, I will nit pick with this statement a little bit. I think the price targets were where they needed to be. I think the reasoning was wrong. From memory, the estimates for earning for Apple were around 50 dollars per share. To earn that, Apple would have had to grown by about 20% without the fall in margins. With the $100 per share that Apple had in the bank, Apple, on forward earnings, was being valued at less than 15 times future earnings. Not really appropriate for a company that, for the past few years, had been growing much faster than that. Then when Apple starting coming up short on earnings estimates, everybody acted like Apple had been priced for perfection. Maybe the $700 dollar share price was too much too early but then again the sub $400 share price was overdone as well. I think that at least right now, Apple is at least in a somewhat reasonable price range for its earnings. I think it should be higher but I like the present share price better than what it was a couple of months ago.
Neal |
