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Wednesday, August 29, 2012

Apple stock prices target forecast 2013

Apple stock prices target forecast 2013 : Pacific Crest’s Andy Hargreaves today reiterates an Outperform rating on shares of Apple (AAPL) and a $690 price target, writing that his “checks” indicate that the company is seeing “material” improvements in yields of components for the next iPhone model, which he thinks means there could be 20 million more units sold this year than he’d previously thought, and possible upside for the stock to between $720 and $750.

In particular, Hargreaves things are improving for the so-called in-cell display technology that is supposed to make for a thinner screen for the iPhone 5:

Our most recent round of supply checks suggest iPhone 5 component supply is improving meaningfully. More specifically, we believe yield rates from in-cell panel makers have improved, which should support increased iPhone 5 production capacity in FQ4 (Sept.) and FQ1 (Dec.). Although we are not changing our iPhone unit estimates at this point, we have increased confi- dence that supply will not be a material constraint through FQ1 and see the potential for significant upside to our estimates if demand is as strong as we anticipate.

Hargreaves thinks Apple can ship four or five million units of the new model this quarter, the fiscal Q4, and 20 million of the existing models. He sees perhaps as many as 50 million units of iPhone 5 being manufactured in the December-ending Q1, higher than his previous model for 43.7 million, and more than that in the March quarter, higher than his previous model for production of 43.2 million.

There’s the potential for as much as $5 in extra EPS in fiscal 2013, on top of his existing $55.09 EPS estimate, he writes, if Apple delivers 20 million more units than the 163 million he’s currently modeling.

Hargreaves also repeats his claim that Apple may ship 10 million units of a smaller iPad, called the “iPad Mini,” in the December quarter, on top of 15.5 million of the existing model. There are some component issues here too, but not terribly serious, he thinks.

We believe Apple’s touch-panel suppliers are experiencing modest yield issues trying to improve the re- sponsiveness of the glass-film touch panels for the anticipated 7.85” iPad mini. However, these do not appear significant enough to drive anticipated supply below our expectations.

He also notes the possibility this current quarter‘s iPad sales, which he’s been projecting at 16.5 million, may be affected by people holding off for the smaller version:

The continued weak global economic environment and the potential for stable channel inventory in front of a transition to a refreshed New iPad could drive slight downside to our estimate.

Apple shares today are down 23 cents at $674.57

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