Bigger Bite of Biggest Apple

Apple Stock Price Target Update (April 2012) : Right now the Apple stock is trading around $630, surely its gone past what most analysts expected. Now, we recommend booking partial profits around current levels and then one could re-enter this stock around $560 levels. We don’t expect this stock to go past $700 in 2012 as the rally looks over extended on this counter. One may even consider making a switch to Qualcomm for a less volatile ride. Please note that our long term outlook on this stock remains unchanged.

 

Apple continues to remain on the top of the pack with its ability to design revolutionary products. Should you invest in Apple Inc stock in 2011 entirely depends on whether you are comfortable with their innovative business policy. Macs, from the Apple, are the finest personal computers in the world and these are equipped with popular professional softwares such as OS X, iLife, and iWork. Apple has grown in other areas too; it is a market leader in digital music segment with iPods and iTunes online store.

Who could have imagined that Apple would expand above all major players in the mobile phone industry, and that to in such short span? Its iPhone and App Store along with the latest addition to the product line, iPad have been ground-breaking products for the company.

Recently, the stock investors were concerned over Steve Jobs health related issues and the stock was getting weaker. But all these concerns were short-lived, as the Apple stock bounced back on the back of stellar results.  Steve Jobs haven’t been more exited in the recent times as much he was when Apple posted record earnings this quarter.

All the analysts’ expectations and forecasts on Apple’s business were largely surpassed as sales of each and every product in their portfolio were strong on the back of an exceptional holiday season. “We are Firing on all cylinders” and that “exciting things are in the pipeline” were the closely observed phrases from Steve Jobs statement on quarterly results.

The launch of iPhone 4 for mobile users on Verizon network will be a major breakthrough for the company and will surely increase Apple’s share in the mobile business.

A Look at Best Numbers for Apple Ever

• Sales recorded 70.5% higher on YOY basis at $26.74 billion.
• Profit at $6 billion up almost 77%

• Apple is certainly cash rich and its current position including marketable securities stands at $59 billion, which has shown considerable improvement from $51 in Q4.
• EPS grew at around 75% at $6 per share
• Gross margin at 38.5%, better than guidance of 36%

Apple’s Guidance

• They expect revenue to stay around $22billion in Q2
• EPS guidance for Q2 seems conservative at $4.90
• They expect the gross margins to stay at 38.5%

Individual Performances of Apple’s Products

• iPod touch made up for almost 50% of total iPod sales
• Total iPod sales were the only dragger at 19.45 units, down almost 7.3%
• iPad was a stellar show with 7.33 million units, much higher than the average consensus of 6.5 million units.
• iPhone was a show stealer with sales up 85.8% at 16.24 million
• Mac sales showed continued strength and grew at 23% to make it 4.13 million units.

Latest Charts Showing Apple’s Business Growth Trends

Here’s what major announcements investors should expect from Apple in 2011

In-Pipeline for 2011

• Launch of a Verizon version of iPhone4
• iTunes cloud services
• iPad geographic expansion plans
• iPad Carrier subsidies
• Launch of OS X Lion this summer

Key challenge for Apple in 2011

A building concern for Apple is from a pressing to announce Steve Jobs successor, and large investors in the stock are targeting to introduce proposal No. 5 on February 23. This proposal at company’s annual meet may cause some turbulence in the stock price.

Apple Stock Price Forecast for 2011

Analysts take a fresh view on Apple stock after the best quarterly numbers and major financial firms increased their targets for 2011. They expect the stock to remain in the range of $390 to $420 by the year end.

These targets on Apple stock seem to be cautiously priced as iPhone and iPad are expected to remain the key drivers of growth and revenue in the intermediate term and analysts expect Mac to regain its market share in the near term.

We can raise the target a bit higher considering that launch of iPhone on Verizon network may boost per share earnings by at least $1.50 on annual basis.

iPad sales may surprise investors in 2011 and this product can be expected to tap a larger share in coming quarters.

Personally I wouldn’t look much at the targets from some of these analysts as they seem to be taking it a bit nervy. This stock is all good for a $500 if the markets continue to trade above their current levels by the year end

You can still buy these Stocks with Attractive Dividend Yields for 2012 and beyond