Technically, it was Hudson Square's Daniel Ernst. But we have a few caveats.
Ernst on CNBC
Eyebrows were raised in October 2010 when Daniel Ernst hiked his 12-month Apple (AAPL) price target from $300 a share to $500. But perhaps drawing attention to himself was the point. The senior analyst at Hudson Square Research is now a regular contributor on CNBC and his current price target -- $700 -- is once again the Street's highest.
With Apple passing the $500 mark in early trading Monday, you might think Ernst had earned bragging rights for making the first $500 per share call.
But a look at his track record on Apple suggests otherwise. Not only did his Oct. 2010 price target bear no relation to the numbers in his spreadsheet, but of all the analysts who follow the company, his published estimates have proved to be among the worst. Over the past five quarters, his average error on earnings and revenues are second only to Morgan Stanley's Katy Huberty for the magnitude of their misses. Four days after his famous $500 call, he finished last in our quarterly Earnings Smackdown and got singled out in the write-up:
"We're not sure what to say about Hudson Square's Daniel Ernst, who took first place in gross margin by a rounding error but came in dead last in revenue and EPS and missed the iPhone number by 4.6 million units."
Finally, we should point out that Apple didn't actually reach $500 within the 12 months of Ernst's price target. (On Oct. 14, 2011 shares closed just over $422.)
According to Terry Gregory, who tracks such things at AAPLInvestors.net, credit for the best 12-month calls might be shared by Piper Jaffray's Gene Munster and Ticonderoga's Brian White, who on Jan. 19, 2011, set price targets of $484 and $550, respectively.
Or, depending on when Apple actually hits $500 per share, credit might belong to Evercore's Robert Cihra, who set his 12-month $500 target on April 21, 2011.
For the record, Bullish Cross's Andy Zaky, a blogger who is not part of the Wall Street establishment, wrote an item for Fortune.com two days before Cihra's note in which Zaky predicted Apple would soon be trading above $500, although he thought it would happen before the end of 2011. See Why Apple's shares are dirt cheap.
Approaching Apple from another angle, Asymco's Horace Dediu noted last May that while the share price seems to bear no relation to earnings growth, it has for the past three and a half years been highly correlated to the company's holdings in cash and marketable securities. In September he posted a chart that showed Apple hitting $500 when cash per share reached $100. On Friday he posted a follow-up. "With current cash per share reaching $95 to $100," he wrote, "it seems that the share price should be around $500 any time now."
Dediu's chart:
Source: Asymco.com
And that percentage is likely to increase sharply now that China has the iPhone 4S
Click to enlarge. Source: Asymco.com
The chart at right from Horace Dediu's Asymco blog shows the U.S. share of iPhone activations growing last quarter due, he speculates, to the U.S. launch of the iPhone 4S and the addition of a third domestic carrier, Sprint (S).
But the long-term trend is clear. The U.S. is becoming a progressively less important MORE
Philip Elmer-DeWitt - Feb 10, 2012 7:06 AM ET
Two ways of seeing how well (or badly) the pros and amateurs predict Apple's earnings
Green = Amateurs, Yellow = Pros Source: Dediu, PED
We've been trying for several years to find the best way to show how much better the so-called amateur analysts (some of whom have since gone pro) are at estimating Apple's (AAPL) quarterly revenue and earnings than the Wall Street professionals who do it for the big MORE
Philip Elmer-DeWitt - Feb 6, 2012 10:59 AM ET
Apple's mobile phone shipments nearly doubled in 2011, overtaking LG and ZTE
Click to enlarge. Source: IDC
On the strength of sales of the iPhone 4S last quarter, Apple (AAPL) jumped two spots in IDC's ranking of the world's five largest manufacturers of mobile phones -- smart or otherwise.
In a press release issued Wednesday, IDC reported that weakness in the demand for so-called feature phones dragged down market growth in the MORE
Philip Elmer-DeWitt - Feb 2, 2012 8:18 AM ET
Something is amiss when Apple's price per earnings per trailing growth approaches zero
Click to enlarge. Source: Asymco.com
"I want to scream every time I see or hear another one of those ridiculous claims that Mr. Market doesn't understand Apple (AAPL), doesn't respect it, doesn't get it, etc." an investment analyst named Marc Gerstein wrote in an unusually condescending Seeking Alpha post last week. "The ones who don't get it are those MORE
Philip Elmer-DeWitt - Jan 31, 2012 3:23 PM ET
Apple's earnings grew 116% in Q1. So why is the Street is looking for 44% in Q2?
Click to enlarge. Source: Asymco.com
After Apple (AAPL) blew past everybody's expectations on Tuesday, reporting sales up more than 73% and earnings up nearly 116%, analysts up and down Wall Street rushed to revise their spreadsheets and issue new notes to clients. We got our hands on 39 of them -- plus a note MORE
Philip Elmer-DeWitt - Jan 28, 2012 1:28 PM ET
37 years of computer history in three graphs, two blogs and a podcast
NOTE: This is a log chart. Source: Horace Dediu
The chart above, one of three that Horace Dediu has posted on Asymco.com over the past two days, and which he discussed on his Critical Path podcast Wednesday, takes some explanation.
First, it's on a log, not a linear scale, so every unit on the Y-axis represents an exponential increase in MORE
Philip Elmer-DeWitt - Jan 19, 2012 7:53 AM ET
The slingshot ride in advance of the company's quarterly earnings report has begun early
"If you can keep a good stock down then you are able to load up for the ride back up. It's like a slingshot -- the harder you pull, the more propulsion you generate." Jason Schwarz' Apple: Seven Reasons Shorts Love It.
I'm reminded of Jason Schwarz' 2009 quote every time I see a chart like the one at MORE
Philip Elmer-DeWitt - Jan 7, 2012 6:29 AM ET
Horace Dediu tells the story. The narrative is fictional, but the numbers, sadly, are real.
Source: Asymco
In masterpiece of analytical satire, Asymco's Horace Dediu on Thursday recreated the thought processes that led Wall Street's top analysts to grossly underestimate Apple's (AAPL) earnings every year since 2005.
Their performance would be laughable if it didn't materially affect Apple's share price. But the numbers these analysts come up with form the "consensus" that MORE
Philip Elmer-DeWitt - Dec 16, 2011 8:16 AM ET
The creator of Asymco.com is looking for 67% growth in sales and 91% in earnings
Source: Asymco
Like most independent analysts, Asymco's Horace Dediu got clobbered last quarter when Apple (AAPL) reported earnings that grew by "only" 52%. (See chart at right).
As a result, the best estimates last quarter turned out to be those submitted by the Wall Street analysts with the worst Apple track records. (See our Q4 2011 Earnings MORE
Philip Elmer-DeWitt - Dec 9, 2011 7:54 AM ETEvery morning, discover the companies, deals and trends in tech that are moving markets and making headlines. SUBSCRIBE
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| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 7.95 | -0.16 | -1.97% |
| Intel Corp | 26.73 | -0.43 | -1.58% |
| Microsoft Corp | 31.27 | -0.17 | -0.54% |
| Ford Motor Co | 12.28 | -0.25 | -2.00% |
| General Electric Co | 19.39 | 0.17 | 0.88% |
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,938.67 | -27.02 | -0.21% |
| Nasdaq | 2,933.17 | -15.40 | -0.52% |
| S&P 500 | 1,357.66 | -4.55 | -0.33% |
| Treasuries | 2.00 | -0.04 | -1.96% |
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