Apple target at $400/share. Is there a grown up in the room?
This just in from 24/7 Wall St:
They go on to say:The culprit is an aggressive analyst call from Morgan Stanley. The upgrade is on estimates, target and even in name as the stock is now on the firm’s Best Ideas list. The base-case target $310, from $275 before. What is more interesting is that the scenario has been laid out for Apple shares to hit $400 per share, and the bearish case is only a price target of $210 per share.
73 million iPhones! 12 million iPads! Yikes. Let me put on a contrarian hat and express some concern about these numbers. I read every day in the paper about a Sovereign Debt crisis in the EU and that the budget deficits in the US are going to sink our economy and the bullish case for Apple is that people buy 90 million devices that they don't need!The bull-case also assumes Apple ships 12 million iPads and 73 million iPhones in 2011
Let me repeat that: no one NEEDS an iPhone. no one NEEDS an iPad. The economy is going to hell and Apple will be the largest market cap company in America by selling vanity tech toys:
Now don't get me wrong - I love my Mac. I have been an Apple customer since the first Mac came out. But if Apple becomes the largest market cap company in America I might have to sell everything and move to New Zealand because we have gone off the deep end. When Black Friday comes Apple will be the biggest loser.Without going on and on, let’s just consider the math on the $400 target. A forward P/E of 20 based upon $20.00 normalized EPS. At $250, Apple’s current market capitalization is just over $227.5 billion. At $400.00, the market cap would be $364 billion. The gap on market caps is now there: Microsoft Corporation has a $233 billion market cap today and it is #2 on our “real-time 500″; Exxon Mobil Corporation (NYSE: XOM) has a market cap of $284.3 billion today.A $400 target would make Apple the largest company in America by market cap. And then some, and then some more.
I feel a bubble coming on. Do you?
