Apple Inc. (NASDAQ:AAPL) has received a lot of plaudits since launching its iPhone 5 on September 12; several analysts have raised their earning estimates on the company. However, a majority of analysts have maintained their target price for the stock. While some Equity research firms adjusted their earnings estimates and price targets just before Apple Inc. (NASDAQ:AAPL) launched its most awaited device, others such as BMO Capital Markets took a little bit longer before issuing their report on revised estimates and price target.
Following the launch of iPhone 5, and the beginning of preorders, BMO Capital Markets has revised upwards, a majority of its initial estimates on Apple Inc. (NASDAQ:AAPL), with some few downward revisions. Illustratively, BMO has revised Apple’s September quarter iPhone sales from 22 million units to 24 million, with 15-18 million old generation iPhones set to be shipped, while the new iPhone 5 is expected to ship between 8-10 million units.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
BMO’s estimate for the September quarter lie just under Mizuho Securities estimate of over 25 million units. However, BMO estimates approximately 50 million units in iPhone sales, which is way above Mizuho estimate of about 45 million units, as covered in one of our earlier articles. Additionally, both have a price target of $750 for Apple Inc. (NASDAQ:AAPL) stock.
Nonetheless, their price targets fall way below those of FBN Securities, which raised its target from $800, to a record $1,000, the highest target currently, while Gene Munster of Piper Jaffary has rated the stock as a Buy, with a price target of $910 per share. Elsewhere, Sterne Agee & Leach joined Goldman Sachs Group, Inc. (NYSE:GS), another sale side analyst, in their prie target of $810.
BMO Capital Markets lowered its unit sale estimates on Mac CPUs, saying that the PC environments is not as friendlier. The PC industry is indeed facing a lot of challenges from other forms of types of computers, including laptops and tablets, which are threatening to render the old fashioned desk top computers obsolete.
Other devices such as iPads and iPods, saw no change at all, as BMO maintained their initial estimates of 18.3 million and 8.96 million units respectively. The latter, though, does have an upward revision on its FY2013, from approximately 31.5 million units to just over 32 million units.
Apple Inc. (NASDAQ:AAPL) is expected to maintain an average price to earnings ratio of 13.4X over the next two years with the figure rising sharply on the third year to push the average estimate to 15.8X. The P/E ratio of 12-13X, while the full year 2013 estimate is now at 13-14X.
Over the next two years, Apple Inc. (NASDAQ:AAPL) stock price is expected to be 10-18X the company’s earningsd per share, with a majority of the times being pegged between 11-14X, and 16X.
This indicates less volatility in the company’s stock, within the next two years, while the three year average indicates high volatility, as the P/E ratio could be more than 25X at some point, which also translates to the varying price targets we have from analysts, with some pegged at $750, while others are at $1,000.
As at the time of this writing, Apple Inc. (NASDAQ:AAPL) stock was trading at $698.50 per share, up $7.22, or 1.04%, from Friday’s closing price.