Early this morning, we saw headlines on the Bloomberg terminal about Cantor Fitzgerald initiating coverage of Apple with a “Buy” rating and an unusually high price target of $US777.
Then we got the note from Cantor this morning. Apparently it has hired Brian White, formerly of Topeka Capital, to be its Apple analysts.
White is an interesting Apple analyst. In April 2012, he had a price target of $US1,111 on Apple. He stuck with that target until January of this year when he finally caved and went to $US888. (At that point, the stock had lost ~$200 in value from its $US700 high point.)
Now he’s with Cantor, but $US777 is more bearish than $US888, which was his last target at Topeka.
Here’s the synopsis of his bullish enthusiasm:
After a Year to Forget, We believe Apple is Poised for Liftoff in FY14. The past year was extremely challenging for Apple’s stock, as the higher-end smartphone market hit a wall and the ramp of new product categories did not come to fruition. As such, most investors would like to forget FY13; however, we believe innovation at Apple has not stood still and that the fruits of the company’s labour will begin to show up in a major new product cycle over the next 12-18 months. We believe the challenges over the past year will prove to be a blip in a longer-term positive trend at Apple. In fact, the Worldwide Developers’ Conference in June was Apple’s first event after an eight month dry spell, and we believe this conference will prove to be the first of several product events in this new product cycle that we believe will begin with the unveiling of the iPhone 5S and iPhone 5C on September 10, followed by a refresh of the iPad mini, iPad and Mac update. Furthermore, we expect a full blown Apple TV (i.e., “iTV”) and “iWatch” by the end of CY14. At the same time, we believe Apple’s profit cycle bottomed out in 3QFY13. Analogous to a coiled spring that was methodically pushed lower over the past year, we believe Apple’s stock reached a bottom in the June quarter and is now prepared to snap back, ultimately reaching our $US777 price target over the next year.
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