One Analyst’s Very Bullish Take on Apple Inc. (AAPL)’s Future

Apple Inc. (NASDAQ:AAPL) is the most widely discussed stock in the U.S., both on the blogosphere and on Wall Street, and it’s no secret that many opinions of the tech giant have turned sour over the past three months or so. After a meteoric rise of more than 250% since the start of 2010, shares of Apple have fallen by more than 25% in the past three months, and briefly fell below the $500 mark in pre-market trading earlier today.

Apple Inc. (NASDAQ:AAPL)

One of the most respectable Apple analysts on the Street, though, is defending his bullish $900 price target on the stock. Gene Munster, of Piper Jaffray, expects AAPL to be investors’ best friend come 2013, when he predicts the company will release a TV and the newest iterations of its iPhone, iPad, and MacBook lines.

Now, it’s not that difficult to predict that Apple should release an iPhone 5S with iOS 7 next year, or even an upgrade of its laptop, but Munster has been a bit more bullish on the prospects on an Apple Inc. (NASDAQ:AAPL) TV than most of his peers. Regarding his $900 price target, Munster had this to say in a recent note to investors (via Business Insider), within a section labeled “Why The Stock Can Work Looking Forward.” Here’s the excerpt:

“The bottom line is that we believe AAPL needs something that investors can look forward to in the numbers for the stock to work well. We believe a core reason the stock worked in early 2012 was expectations for the iPhone 5 as the stock started the year at ~$411 and peaked at ~$702 in September ahead of the iPhone launch (71% increase at the peak). In 2011, we believe the stock worked (from $323 to $422 at the peak, 31% increase) due to anticipation of the next iPhone and iPad ramp. We are more optimistic about 2013 as we believe Apple will not only launch a television, but also a lower priced iPhone for pre-paid markets in 2014 or potentially sooner.”

The most intriguing aspect of Munster’s note is its mention of stock price performance in anticipation of major product releases. With reports that an Apple Inc. (NASDAQ:AAPL) TV could add between $4 and $5 to Apple’s EPS total next year, it’s an important point to make. In this scenario, investors could push the stock higher due to the classic earnings-based appreciation line of thinking, assuming that a television is released sometime in the fall or winter of 2013.

On average, Wall Street expects Apple to generate an EPS of $49.08 in FY2013, meaning that if Munster’s prediction is correct, we could see upside of 8-10% from this consensus. Couple this potential with Apple Inc. (NASDAQ:AAPL) bargain bin valuation – below 9 times forward earnings and a PEG of 0.6 – and we can see that there’s some massive value potential here.

Let us know your thoughts on an Apple TV in the comments section below, and if you think the release of such a product could act as a growth catalyst, pushing shares of the company higher over the next 12 months.

For more Apple Inc. (NASDAQ:AAPL) analysis, check out some of our recent coverage:

The Real Reason You Should Be Buying Apple After the Selloff

Apple Shows Strong iPhone 5 Sales in China on Opening Weekend

Apple to be Added to Several WisdomTree ETFs

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

The 15 Most Murderous Countries in the World

10 Largest Colleges in the World: Bigger Isn’t Always Better

Comedians in Cars Getting Coffee: The 6 Comedians Seinfeld Needs to Interview

Easy Money: The 10 Most Successful Investors in the World Today

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!