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Technology Stocks : Apple Inc.
AAPL 270.25-0.4%Oct 31 3:59 PM EST
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To: rnsmth who wrote (132782)5/2/2012 11:02:36 AM
From: Moonray1 Recommendation  Read Replies (1) of 213172
 
Apple will have earnings per share of over $75 in Fiscal 2013.
I prefer something a little more conservative. Like this Standard & Poor's blurb issued the day after
the earnings announcement last week:

"04/25/12 05:33 am ET ... RETRANSMIT - S&P RE- ITERATES BUY OPINION ON SHARES OF APPLE (AAPL 560.28****): AAPL posts Mar-Q EPS of $12.30 vs. $6.40, well above our estimate of $11.53, reflecting a notably higher gross margin than we projected, owing largely to low flash memory costs. Revenues rose 59%, reflecting gains in iPhones and iPads, which accounted for three quarters of total revenues. Greater China accounted for 19% of revenues. We are raising our EPS estimates for FY 12 (Sep.) to $48.00 from $46.50, and for FY 13 to $55.00 from $53.50. Our FY 14 forecast remains $62.00. Re- flecting our higher estimates, we are raising our 12-month target price to $825 from $800. /S. Kessler"

If one applies their earnings and a PER of 15 then AAPL's price should be:
2012 Q2 $12.30 = $41.02 12 mo x 15 = $615 (about where it is now)
2012 Q3 $11.67 = $44.90 12 mo x 15 = $673
2012 Q4 $10.17 = $48.00 Annual x 15 = $720 (next fall)
2013 $55.00 Annual x 15 = $825
2014 $62.00 Annual x 15 = $930 (two and a half years from now)

I use a 15 PER because AAPL seems to have flat-lined at about that number. The "Great Recession"
coupled with AAPL's earning rising faster than the stock price seems to have taken a PER toll:




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