If everything goes right and Apple AAPL has a few more hits, the tech giant has the potential to earn more than $70 per share. Without significant P/E expansion, the stock can hit $1,000.
I have been a mega bull on Apple ever since recommending a buy in the stock when it was $131. I rely heavily on rigorously analytical probability based algorithms. I was writing about the high probability of Apple stock reaching $1,000 long before Apple was a popular investment.
The highest target out there on Apple is $1,650. A simple analysis shows that $1,650 is a pipe dream.
In my 30 years in the market, I have learned that there are no certainties. I have always said that there is a probability of Apple reaching $1,000. Currently, the ZYX Change Method calculates this probability to be 55%.
In their eagerness to beat their competition with a higher target, sometimes analysts fail to see the forest for the trees. Let us do a qualitative analysis. To keep the analysis easily understandable, this article will simply approximate the major numbers and ignore the minor numbers.
As an example, the $1,650 target on Apple is based on 2.5 time sales. Apple has 941,572,000 shares outstanding on a diluted basis. At $1,650 per share, the market value of the company will be $1.55 trillion. At 2.5 time sales, this means Apple sales will reach $621.44 billion.
Computers, iPhones, and iPads constitute 86.69% of Apple sales. The models of some analysts assume 83% of future revenues will be from iPhones and iPads.
At The Arora Report , we have done detailed work, region by region, on demographics….Read more at MarketWatch
