Despite the less than 1% drop in the stock to close at $585.56, the momentum behind Apple right now is palpable. Pre-orders for the new iPad have piled up ahead of Friday's launch, and the sell side continues to gush about Tim Cook's juggernaut. On Wednesday, it was Morgan Stanley lifting its price target on the stock to $720 from $515 (while also saying the shares could run above $900 by the end of 2013).
Piper Jaffray did its part early Thursday, going to a price target of $718 from $670 while maintaining its overweight rating and boosting its calendar 2013 unit sales expectations for both the iPhone and the iPad.
"We are raising our iPhone, and iPad numbers for CY13 to more accurately reflect Apple's strong position in these markets," the firm said. "Additionally, we are introducing estimates for CY14 and CY15 to outline a roadmap for Apple's continued growth. Our base model assumes Apple will sell 385m iPhones and 176m iPads in CY15, leading the company to $80 in EPS on $320b in revenue in CY15. We are not yet factoring in an Apple Television (late CY12) which could add ~4% to each year's revenue estimates. We remain buyers of AAPL."
For 2013, Piper now expects iPhone sales of 189 million units, up from a prior view of 162 million units; and iPad sales of 86.5 million units, up from a prior view of 75.5 million units. The firm said its view is based on expectations that Apple will launch a redesigned LTE-capable iPhone 5 in the calendar third quarter of 2012; and that it will "release a sub-$300 iPad with a smaller display in CY13."Even as the stock continues to break to new all-time highs, the forward price-to-earnings multiple is still a reasonable 12.2X vs. 13.1X for the S&P 500 as of Friday's close. Of the 54 analysts covering Apple, 47 are bullish at either strong buy (24) or buy (23), and this rash of higher price targets seems likely to continue with the stock within shouting distance of the current 12-month median target of $605.
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