Lesson Learned: Don't Try to Predict Pullbacks in Screaming Uptrends!
Behind The Money
By John Melloy, Executive Producer, Fast Money
Morgan Stanley proposed a bull case for Apple that would drive the iPhone- and iPad-makerâs stock price to $960 or higher, the first forecast from a Wall Street analyst on the company to approach $1 trillion in market value. Appleâs stock soared to a new all-time high following the call.
The price target valuing Apple at about $900 billion ($960 x 932.37 mln shares outstanding) is based on businesses adapting iPads, a new iPhone running on a faster wireless network and emerging market growth. The forecast represents a 69 percent gain from Tuesdayâs close.
âDespite being well above investor expectations we view our CY13 bull case (of) $80 EPS/$960 valuation as reasonable,â wrote Morgan Stanleyâs Katy Huberty in a note to clients. âWe assume no multiple expansion despite a possible dividend.â
Apple shares are up 44 percent this year after selling an astounding number of iPhones and announcing a new iPad last week. The stock surpassed Exxon Mobil as the most valuable company in the world earlier this year and has a current market value of about $540 billion.
The amazing move in Apple this year has many investors (and now one analyst) thinking the company could be the first to reach $1 trillion in market value, a milestone that Wall Street once dreamed about for companies like Cisco and Microsoft during the late 1990s. Those dreams were dashed after the tech bubble burst and sky-high growth multiples of 30 times â even 50 times â earnings came crashing back to earth. But unlike back then, Appleâs price-earnings ratio is currently just 17.
Morgan Stanleyâs Huberty put a base case price target of $720 on Apple in the report, up from her previous target of $515. The less-bullish price target would occur if âChina Mobile and TV catalysts donât materialize,â she said in the report. Both cases are based on a price-earnings ratio of 12, which is at the low end of Appleâs historical forward P-E range, according to the analyst.
Behind The Money
By John Melloy, Executive Producer, Fast Money
Morgan Stanley proposed a bull case for Apple that would drive the iPhone- and iPad-makerâs stock price to $960 or higher, the first forecast from a Wall Street analyst on the company to approach $1 trillion in market value. Appleâs stock soared to a new all-time high following the call.
The price target valuing Apple at about $900 billion ($960 x 932.37 mln shares outstanding) is based on businesses adapting iPads, a new iPhone running on a faster wireless network and emerging market growth. The forecast represents a 69 percent gain from Tuesdayâs close.
âDespite being well above investor expectations we view our CY13 bull case (of) $80 EPS/$960 valuation as reasonable,â wrote Morgan Stanleyâs Katy Huberty in a note to clients. âWe assume no multiple expansion despite a possible dividend.â
Apple shares are up 44 percent this year after selling an astounding number of iPhones and announcing a new iPad last week. The stock surpassed Exxon Mobil as the most valuable company in the world earlier this year and has a current market value of about $540 billion.
The amazing move in Apple this year has many investors (and now one analyst) thinking the company could be the first to reach $1 trillion in market value, a milestone that Wall Street once dreamed about for companies like Cisco and Microsoft during the late 1990s. Those dreams were dashed after the tech bubble burst and sky-high growth multiples of 30 times â even 50 times â earnings came crashing back to earth. But unlike back then, Appleâs price-earnings ratio is currently just 17.
Morgan Stanleyâs Huberty put a base case price target of $720 on Apple in the report, up from her previous target of $515. The less-bullish price target would occur if âChina Mobile and TV catalysts donât materialize,â she said in the report. Both cases are based on a price-earnings ratio of 12, which is at the low end of Appleâs historical forward P-E range, according to the analyst.
