THE APPLE INVESTOR: Everyone On The Street Is Upping Estimates And Price Targets

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AAPL Flat On iPad Launch Day 
Markets are seesawing as CPI comes in line with expectations despite a miss on industrial production numbers. Shares of AAPL are flat after a strong run as users queue up in lines around the world. Where do you think the stock goes next, $500 or $700? Investors will be looking for the new iPad adoption as pre-orders sell out; iPhone penetration, especially in China and emerging markets; market share growth of the Mac business; the evolution of Apple TV; and platforms such as Siri, iAd, iBooks and Ping. Shares of Apple trade at 11.1x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).

Apple Axe Ups His Price-Target Ahead Of iPad Launch (AppleInsider)
Piper Jaffray analyst Gene Munster upped his price-target on Apple stock to $718, right before the new iPad launches in the U.S. and 9 other countries. Munster believes that Apple will sell at least a million of the new iPad in the first 24 hours. For the entire year, he believes Apple will sell a total 60 million iPads, which would be a nearly 50% increase from the 40.5 million tablets Apple sold in 2011. By 2015 he expects Apple will sell 176 million iPads in a single year, while still controlling 60% of the market.

Canaccord Estimates Apple To Sell 66 Million iPads This Year (BGR)
Canaccord Securities analyst Mike Walkley anticipates Apple will continue to dominate both market and value share in the growing tablet market through 2013, a lead that will not be challenge in the near future. He increased his 2012 iPad shipment estimates to 65.6 million units from 55.9 million, predicting that Apple will sell 90.6 million units in 2013, up from his previous estimate of 79.7 million. Walkley reiterated a Buy rating on Apple stock, and he raised his price target to $710 from $665.

Morgan Stanley Believes There Is Emerging Market Upside Potential (AppleInsider)
Morgan Stanley analyst Katy Huberty has added Apple to the firm’s Best Ideas list. She continues to believe that investors “underestimate” Apple’s strong position, and is raising her price target from $515 to $720. She also said the stock could climb as high as $960 by next March in a bull case scenario. Basically, the company’s revenue has to grow by 56% this year, and 36% next year. Huberty named China and other emerging markets, like Brazil, as “huge untapped markets” for Apple that present a long-term upside for the company.

UBS Thinks That The iPhone 5 Launch In October Will Be The Biggest Ever (Business Insider)
Maynard Um at UBS, putting a price target of $675 on the stock. That’s up from the previous target of $550 billion. He expects the iPhone 5 to launch in October, and that it will accelerate the number of carrier partners it sells through, making it the “biggest launch ever.” He also believes new billing practices by carriers that allow customers to buy data packages that work across multiple devices will encourage customers to buy higher-end iPads.

Don’t Forget About iTunes, Apple’s $8 Billion Business (The Street)
With so much going on these days at Apple, it’s easy to forget about its little business called iTunes. In Apple’s fiscal 2011, iTunes represented 6% of its net sales, coming in at $6.3 billion. In the most recent holiday quarter, iTunes clocked $2 billion in revenues. To put that in comparison, in that same quarter, Facebook did $1.1 billion in revenue. Even Google overall only did $10 billion in revenues for the quarter. iTunes is not a sexy product like iPhone or iPad, but it represents the lifeblood of those devices.

The Best Days For Apple Stock Are Behind It (BusinessWeek)
Roger McNamee, managing director at Elevation Partners, talks about his outlook for Apple. It’s a big company. The question now is how does it double in value. It basically needs a bull market. It needs to get 70% of its return from a good market environment. McNamee goes on to say that It’s the only public stock he’s bought in his professional career. That said, he believes the best days for the stock are behind it, but the best days for the company are not. And here’s the technical chart that says Apple stock is doomed.

Funds Love Apple Stock (USA Today)
If you’re thinking of making Apple a core holding, your fund manager may have beaten you to it. Morningstar says 788 U.S. stock mutual funds had Apple as one of their top 10 stock holdings. For 465 funds, Apple was the largest position: Fidelity Select Computers has 20.5% of its assets in Apple, PowerShares QQQ Trust has 15.7%, and Turner Large Growth has 10.9%. The Fidelity Contrafund owns the most Apple shares at 14.5 million, worth about $8.2 billion, or 8.6% of the fund’s assets.

China Will Sell 137 Million Smartphones This Year (IDC)
China will surpass the U.S. in smartphone shipments this year, a title which the U.S. is never expected to regain, according to IDC. China is predicted to have a 20.7% share of the global market this year, edging out the U.S. share of 20.6%. It is estimated that 137 million smartphones will be sold in China this year. China began outselling the U.S. in smartphones in the second half of last year.

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