RSS
Home
Cramer sets a $300 price target for Apple
Print
Email
RSS
Subscribe
Apple Cannot Meet Consumer Demand
Apple Inc. reported blowout third quarter earnings on Monday, October 19, 2009. More importantly, they said the company cannot meet demand. These are powerful words that every company wishes they could share with investors, but leave it to Apple to impress the financial community.
Consumers can't get enough of Apples' iPhone, iMacs, and their MacBooks. Because of this, Jim Cramer raised his target price on the stock from $264 to $300 per share. Surprisingly, Apple is outperforming other large players with only 3% of the world cell-phone market and 4% of personal computers.
$400? No, $300 Sounds Better
Cramer is now expecting Apple to report $13 a share in earnings for the next fiscal year. He is expecting money managers to pay one time the growth rate for the stock. The growth rate ,30%, times $13 per share equals $390. Cramer chopped off $90 to make his prediction $300 per share, because he said no one would ever believe him if he predicted $400 per share.
Stock is Near All Time Highs
Earnings on Monday sent AAPL up to the $200 level, or up 5%, to levels not seen since the stock market peak in 2007. Since the March 2009 lows, AAPL has been on an incredible tear, with a near vertical rise similar to the one during 2006 and 2007. The last time AAPL reached this level it quickly reversed and sold off down to the low $100 range in just a month.
Breakaway Gap?
With the gap up after earnings, traders are trying to figure out if this is yet the start of another break out to higher highs, or if this is the high for awhile. A breakaway gap is unlikely at these extended levels, so AAPL should at least revisit the low $190 level.
How exactly is $300 Per Share Possible?
The most intriguing view of AAPL is the 4 year weekly chart. It appears as though a huge bull flag has formed over the past 3 years, and AAPL has recently broken out of the flag at the $145 level. Would you believe the target price of the pattern measures to $300? It's hard to imagine AAPL will have the bullish strength to continue 50% higher with the Dow Jones teetering at the 10,000 level, but until a reversal happens, the bull flag target price has to be respected.
Related Articles:
Add a Comment
.jpg)
