Apple stock predicted to hit $1,000 a share

The new iPad is displayed at the flagship Apple Store on March 16, 2012 in New York City. Apple stock has defied gravity to top $600 a share. Now two analysts predict it could hit $1,000, creating a $1 trillion company.

Kai Ryssdal: From the Garden of Eden all the way to Sir Isaac Newton, the apple has long been associated with falling.

Not so, though, Apple stock. Three years it ago, it went for something near $100 a share. Two months ago, $500. Today, $629 and change. It's the kind of rise that's fun to watch, but that tends to make actual Apple investors nervous.

Get this, though. There are two Wall Street analysts predicting Apple shares will hit $1,000. Each. That would make the company worth a cool trillion dollars on the stock market, and does oblige one to ask this question: Where the heck do they come up with these numbers?

Our New York bureau chief Heidi Moore reports on Apple Fever.

Heidi Moore: An iPhone not just a phone. It’s a music player, a book reader, a calendar, a notebook, a camera, a GPS device, a voice recorder and a video-game machine. And it syncs with a Mac, and an iPad.

Oliver Pursche, a shareholder, says Apple has given birth to an entire ecosystem.

Oliver Pursche: They sold more iPads in 2011 than babies were born in the United States.

It has even more going for it this year: the iPhone 5, Apple TV, and the potential to grow explosively in China. That’s why Brian White, an analyst with Topeka Capital Markets, predicts the stock will hit $1,001 a share within a year.

Brian White: They’re creating a digital grid: The Apple digital grid. Do you want to be on Apple’s digital grid that’s a Ferrari, or someone else’s digital grid that’s a scooter?

That Apple’s labor issues in China won’t trim the company’s profits. Customers continue to crave Apple products and for investors too, it’s also about emotion. It’s called Apple Fever.

White: It’s a company with a soul. You can’t really emulate that anywhere else, right?

For instance, Bank of America ‘s stock has risen more than Apple’s this year. But as Oliver Pursche notes:

Pursche: You don’t see people in love with Morgan Stanley or Bank of America the way they are with Apple.

Moore: It’s an emotional attachment, almost.

Pursche: Yeah.

Pursche’s firm bought Apple shares at around $100. He calls $1,000:

Pursche: Probably a little bit of wishful thinking.

But he’s not planning on selling.

In New York, I’m Heidi Moore for Marketplace.

About the author

Heidi N. Moore is The Guardian's U.S. finance and economics editor. She was formerly the New York bureau chief and Wall Street correspondent for Marketplace.
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Apple stock price is worth every penny, that’s if you are smoking the right stuff.

The insanity of the speculative markets continue to be cheered by deceptive advocates who have made fortune but don’t acknowledge the actually cost to the United States future which is likely to see a declining standards of living for years to come. This is all done for a cause, so that a handful of people can make their billions by manipulating the stock market to show an illusion of prosperity returning to the economy.
The analyst which are projecting Apple stock to reach $1000 a share are the likely the same expletive, which made though wonderful forecasts about similar bubble stocks during dot com bust. I would have like to use the actual word which best describe these analysts, but I probably would have been censored.

I don’t know what dope the herd is smoking, but it must be good.

If apple stock price continues to increase, don’t jump for joy. The continually rise is it share price is just an example of herd investing as there are no other alternative. Apple stock price has nothing to do with fundamentals and can be attributed to the manipulation by institutional investors which have created another bubble. As long as the herd believes the fairytales in regards to apple growth and income potential the stock will increase. As soon is its net income and growth don’t meet the ridiculous expectations it will drop.

Apples net income will stagnate. It is likely apples net income will not exceed 40 billion in 2012. Apples 2011 income was approximately 26 billion. A 14 billion increase in net income is a significant change and is not likely to happen. What is apple margin on it products and how much additional gross income does it required to realize 14 billion increase in net income? Every additional billion of net income will be more difficult to earn just due to is size which is 1000 million. 140,000 million buys quite a few Ipads, downloads and other apple products.
By comparison NASA Space Shuttle operating budget in it last year was 3 billion. I provide this to illustration, to give the cheerleaders a clued about the staggering amount of income apple currently has.
Apple net income is rarely mentioned. Apples net income from the past five years, from 2007 to 2011 is approximately 56.5 billion. A major jump in sale and income came in 2010 to 2011 when its net income increased by 11.91 billion.
What is never asked is how a company with a net income of 25.92 billion in 2011 can have achieved capitalization of 565.9 billion, maybe though speculation. Could that be possible?
It is relatively easy to determine apple value utilizing its net income and a capitalization rate. Apple average net income over the last 5 years is 11.3 billion. This income average would typically be utilized to estimate a value. But let use an unlikely scenario that Apple net income in 2012 is 40 billion. If a generous capitalization rate of 10% is used Apple’s value can be estimated by:

40 billion / 10% = 400 billion.
But to entertain all the promoter of apple stock let utilize a capitalization rate of 6%
40 billion / 6% = 666 billion.
I did not calculate that number on purpose. However it is interest. Maybe, apple stock price is associated with one of the deadly sins – GREED. It certainly appears to be.
Apple’s unsustainable income growth is beginning to slow, but this does not stop the analysts from developing deceptive forecast about Apples future growth citing its relatively low market share of worldwide computer, Smartphone and Tablet sales.
One must ask who is paying these analysts for these deceptive forecasts. Could it be the herd on Wall Street which severely damaged the US Economy by all the financial instruments which were developed, supposably to limit risk, but were merely another device which allows them to hedge their bets. This explain why, brokers, traders and hedge mangers can’t make an honest living without rigging the system in their favor.
It’s not surprised that the 70% of Apple’s stock is owned by institutional investors which have created another bubble as there are limited investment alternatives. Apple stock was primed for this collusion, due to it past growth and the difficulty in evaluating its most important characteristic which is the marketing of its products.
Marketing is an intangible asset, akin to Goodwill which is very difficult to evaluate There is a reason, Apple’s sales are less than its competitor and that is due to their products considerably higher cost, which in many cases are functionality no better than their competitors. But if you listen to the experts it’s like Apple has no competitors are competing products which the consumer can choose, but can only buy apple brand.
I have several apple products, including a ipad which is nothing more than a oversize iphone. The Ipad functionality and interface are significantly inferior to a lap top. The appeal must be to the herd, which is high something and give them a convenient place to watch video as its utility is more a like a toy than a useful device.
I could go on about why apple stock is a bubble, but it would be in vain as the herd does not wish to sober up as the dope apple selling is that good. Maybe I need a toke.

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