FBN Securities has raised the price target for Apple Inc. (NASDAQ:AAPL) stock to $1,000, with an outperform rating, from the previous target of $800. FBN has cited the iPhone 5 announcement to be “first of several strong catalysts over the next year.” The iPhone 5 shipments will start on September 21, and FBN expects that over 5 million units will be sold by Septembers end.
The release of other highly anticipated products, such as the iPad Mini and the new iPod Touch & Nano units will further boost the revenues in FY-2013. Additionally, iTV is expected to be announced next year, and FBN expects the business with China Mobile to grow dramatically in the future.
The best thing that will enhance iPhone 5 sales in Q4 of FY-12 is the timing of the launch. Last time, iPhone 4 was launched on October 4, 2011, i.e., in the first quarter of FY-12 and not in the fourth quarter of FY-11. So, the shipments were low in Q4 last year. But, this time, the next generation iPhone has been launched in the fourth quarter, so it will definitely increase the unit sales. FBN Securities has increased the iPhone sales estimates this quarter from 24 million to 29 million units.
iPad Mini, which is likely to compete with Amazon’s Kindle Fire and Google’s Nexus 7, is expected to be announced in October. FBN has also revised its iPad estimates from 81 million units to 96 million in FY-13. Apple may launch iTV by mid-2013, but there are chances of delay. Assuming that the company will a capture 7 percent market share in FY-14, this product alone will add $28-29 billion to Apple Inc. (NASDAQ:AAPL)’s turnover and approximately $5-6 billion in profits in FY-14.
The opportunities in China remain very strong for the company. The Chinese market contributed 16 percent to Apple Inc. (NASDAQ:AAPL)’s revenue in the third quarter this year, and it is growing at 50 percent Y-o-Y. The number of 3G subscribers of top three telecom companies- China Mobile Ltd. (ADR) (NYSE:CHL), China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU), and China Telecom Corporation Limited (ADR) (NYSE:CHA) – is growing at the rate of 27 percent every quarter. Apple Inc. (NASDAQ:AAPL) is in talks with China Mobile to explore new business opportunities, so the future looks bright for Apple.
Currently, Apple Inc. (NASDAQ:AAPL) has a market capitalization of $627.86 billion. Do you think the price target of $1,000 is justified?