Apple Inc. (AAPL)’s $1.2 Trillion Valuation Is Extreme: Mark Hawtin

Is Apple Inc. (NASDAQ:AAPL) really worth $1.2 trillion? Carl Icahn message to CEO, Tim Cook, claiming that Apple Inc. (NASDAQ:AAPL) should be trading at $203 a share has not gone well with GAM Investment Director, Mark Hawtin. During an interview on Bloomberg, Hawtin argued that Icahn’s action can only be compared to showboating and only intended to push the share price higher.

“I think the target price of $203 is extremely outrageous, there are assumptions in his workings. The 12-page letter contains a lot of detail about how they got to the forecast. Some of the assumptions are extremely aggressive like, for example, an Apple TV product which we don’t even know about yet,“said Mr. Hawtin

Apple Inc. (AAPL)

Icahn assumes that the Apple TV product could contribute up to $39 billion of sales by 2017. Icahn remains confident that Apple Inc. (NASDAQ:AAPL) could reach the high valuation of $203 a share, on the back of series of new products such as iPhones, smartwatches and the newly launched mobile payment system. Hawtin, on the other hand, believes Apple remains fairly valued at $100 a share although he still maintains a neutral rating. The analyst argues that there are risks the company will have to bypass if it is to grow to such high margins of $203.

Despite the reservations, Hawtin maintains that Apple Inc. (NASDAQ:AAPL) still has an edge in terms of its product cycle, which he believes will command impressive sales especially in emerging markets. Hawtin remains confident that the newly launched iPhone 6 and iPhone 6 Plus will sell well in India and China.

“I mean this is a fantastic product cycle. The market has been clamoring for a larger form factor, and they got that with the six and the six-plus and those products do particularly well in emerging markets. Emerging markets sales particularly the phablet sized products have done very well,”said Mr. Hawtin.

Apple Pay is another product that Hawtin remains confident will have significant impact on Apple’s revenues, especially if the Apple Inc. (NASDAQ:AAPL) is aggressively able to tap into credit card transactions in the U.S.

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