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
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
Humiliated by a bunch of bloggers, amateur analysts and assorted day traders
Click to enlarge.
With revenues that grew 73% and earnings that more than doubled, Apple (AAPL) proved Tuesday that the fourth quarter results that so disappointed Wall Street last fall were a fluke. The company that Steve Jobs built is still that rare beast in American business: A $400 billion giant that acts -- and grows -- like a MORE
Philip Elmer-DeWitt - Jan 25, 2012 12:15 AM ET
Averaging the Q1 2012 estimates of the six analysts with the best track records
Whisper numbers, according to Wikipedia, emerge from widening cracks in the spreadsheets maintained by Wall Street analysts. Quoting an article by Daniel Svensson, the entry explains:
"When the estimate is first calculated by sell-side analysts, the number is submitted to companies such as First Call to be averaged with other analysts' estimates for the consensus earnings estimate. As MORE
Philip Elmer-DeWitt - Jan 23, 2012 6:19 AM ET
The 18% gap between the Street's estimates and the independents' suggests that it can
Click to enlarge. Data: Company reports, Apple 2.0
Last fall, a Wall Street analyst who shall remain nameless suggested in a note to clients that the days of the big Apple (AAPL) earnings surprises may be over.
He was referring to the string of quarterly reports in which the company beat the Street's estimates by measures so wide MORE
Philip Elmer-DeWitt - Jan 22, 2012 2:38 PM ET
The consensus among 44 Wall Street and independent analysts is just under 14 million
Q1 2012 data points are estimates. iPod touch ests. from Piper Jaffray
If you ignore the fact that iPhones -- and for that matter, iPads -- are a kind of iPod, then sales of what was once Apple's (AAPL) biggest moneymaker have been drifting south since Christmas 2008, when they peaked at 22.7 million for the quarter (Apple's MORE
Philip Elmer-DeWitt - Jan 21, 2012 12:04 PM ET
33 of 46 analysts expect Apple to meet or beat that mark in its quarterly report next week
Click to enlarge.
One of the big computer news stories last quarter was the continued strength of Apple's (AAPL) Mac sales even as the rest of the PC industry was shrinking. (See Mac sales zigged as Windows PC sales sagged in Q4.)
How well did the Mac do? We put the question to our two MORE
Philip Elmer-DeWitt - Jan 18, 2012 2:28 PM ET
With Q1 earnings due next week, the Street and the bloggers are now $4.5 billion apart
Click to enlarge. Data: Company reports, Apple 2.0. Chart style: Adam Bushman
Perhaps professional analysts are just more comfortable underestimating Apple (AAPL). Perhaps they're still smarting from last quarter, when their numbers (for once) came in too high. Perhaps they're suspicious of reports that suggest that Mac and iPhone and iPad sales have never been so MORE
Philip Elmer-DeWitt - Jan 16, 2012 8:25 AM ET
The Street's consensus: 13.5 million. The indies are 10% more bullish
Click to enlarge. Source: Company reports; Apple 2.0
Everybody we've heard from expects Apple (AAPL) to report record iPad sales for the quarter that ended Dec. 31.
And why not? Tablets were a popular gift item this past holiday season. The iPad 2 didn't face much competition -- except perhaps from Amazon's (AMZN) Kindle Fire. And although there were rumors of MORE
Philip Elmer-DeWitt - Jan 14, 2012 2:57 PM ET
Pros and amateurs both expect a blow-out. They're just haggling over the percentage
Click to enlarge. Source: Company reports; Apple 2.0
The most important metric for Apple (AAPL) in the quarter that ended eight days ago -- likely to account for more than half of the company's revenue for fiscal Q1 2012 -- is the number of iPhones it sold from Sep. 25 to Dec. 31.
We've polled nearly 40 Apple analysts -- MORE
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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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