How exactly did Brian White come up with that number?
When last we heard from Ticonderoga's Brian White, a few hours after Apple (AAPL) reported its Q1 2012 earnings, he was reiterating the 12-month price target he had set the previous July: "Apple crushes even the most optimistic expectations," he wrote. "$666 here we come."
Two days later, Ticonderoga closed up shop.
On Monday White resurfaced at a new firm, Topeka Capital, with a new Street-high price target guaranteed to draw attention to itself: $1,001.
"Apple fever is spreading like a wildfire around the world," he wrote in Monday's note to clients, his enthusiasm for the company undiminished, "and we see no end in sight."
What's odd about White's new price target -- which is at least $201 higher than the most bullish of his colleagues -- is that the model supporting it is actually rather modest.
We know of four professional analysts who have called for higher Q2 revenues than White's $37.02 billion, nine with higher EPS numbers than his $10.06, and 15 with higher iPhone unit sales estimates than his 29.64 million. The only number that sticks out in White's spreadsheet is his estimate of 14.47 million iPads, which is higher even than all but two of the most bullish independent analysts.
So how did he get to $1001? By factoring in Apple's cash holdings, anticipating continued breakneck growth and using a P/E ratio from 2006-2010:
Our 12-month price target of $1,001.00 for Buy-rated Apple is based on just over 17x our interest expense/income adjusted CY13 pro forma EPS estimate plus net cash per share of $103.66. This equates to a straight P/E of just over 19x our CY13 EPS estimate and is below the mid-20 multiple of 2006-2010. In our view, Apple's valuation does not reflect the growth the Company has been able to deliver in recent years, nor future growth prospects. Between FY04-FY11, Apple grew sales by 44% per annum and increased EPS by 86% per year. Trading at a P/E (ex-cash) of just under 10x our CY13, we believe the stock still has significant upside potential.
Investors must have liked the sound of that. Apple's shares closed at $618.63, up $19.08 (3.18%) for the day.
Prospered in last year's economic storms, prepared for even rougher weather ahead
"During 2011," writes Ticonderoga's Brian White in a note to clients Tuesday, "Apple was the best performer in our universe of twenty companies, rising by 26%."
Yet despite Apple's (AAPL) recent gains -- and what he expects will be "rougher" waters head -- White is again recommending the stock as his top pick for 2012. Among his reasons:
His expectation that MOREPhilip Elmer-DeWitt - Jan 3, 2012 8:18 AM ET
Rumors of a slowdown in iPhone 4S sales called "off base." iPad may be a different story
[UPDATE: As several readers pointed out, Apple's share price was also hit Wednesday, along with the rest of the market, by the news out of Europe, and by the end of the day had suffered less than the NASDAQ, which fell 3.88% to Apple's 2.7%. Thursday, however, was a different story. By early afternoon, MOREPhilip Elmer-DeWitt - Nov 9, 2011 10:56 AM ET
Bodes well for Friday's launch in 15 countries -- and maybe mainland China by December
Ticonderoga's Brian White, who has been keeping as close tabs on Apple's (AAPL) prospects in China as any Western analyst, reported Monday that pre-orders for the iPhone 4S ended almost as soon as they began in China last Friday.
According to his checks, pre-orders were sold out in Hong Kong 10 minutes after Apple started taking them. MOREPhilip Elmer-DeWitt - Nov 7, 2011 10:24 AM ET
An analyst looks at Apple as an investment opportunity today and likes what he sees
"We would rather own Apple than any other tech company in the current environment."
So writes Ticonderoga's Brian White in a note to clients issued Monday, the day before Apple's (AAPL) Oct. 4 iPhone event.
White has taken a look at the performance of Apple shares over the past two weeks and come to the same conclusion Bullish Cross' MOREPhilip Elmer-DeWitt - Oct 3, 2011 9:08 AM ET
Research in Motion's loss is Apple's gain, as the stock closes at $400.50 for the day
Apple's (AAPL) shares jumped Friday morning in reaction to Research in Motion's (RIMM) earnings report the night before. The iPhone 5 will "steamroll" the new BlackBerry 7, wrote Ticonderoga's Brian White in a morning-after note to clients. "We believe it is only a matter of time before the iPhone and iPad challenge RIMM's enterprise dominance."
Apple MOREPhilip Elmer-DeWitt - Sep 16, 2011 12:33 PM ET
Sony's tablet could be the next to stumble, says another
Wall Street's best and brightest are expressing varying degrees of shock at the news Thursday that Research in Motion (RIMM), which delivered 500,000 BlackBerry PlayBook tablets in the quarter that ended in May, shipped a dismal 200,000 in the August quarter -- suggesting that most of those first half-million units are still sitting, unsold, on store shelves.
"We believe the PlayBook is MOREPhilip Elmer-DeWitt - Sep 16, 2011 10:31 AM ET
Greeted with long lines and stock outs when it arrived in Hong Kong this week
In a note to clients Friday, Ticonderoga's Brian White reported that the new MacBook Air -- which was launched in the U.S. more than four weeks ago -- was greeted with long lines and stock outs when it finally arrived in Hong Kong this week.
Not only did stores run out of certain MacBook Air models, but MOREPhilip Elmer-DeWitt - Aug 26, 2011 7:40 AM ET
One analyst, anticipating a 100+ point run-up over the next 3-5 months, believes it does
"The purchase of consumer electronic devices is not always a completely rational decision, and people buy Apple products for many different reasons, including status, aesthetics, functionality, quality and the "cool factor."
So wrote Ticonderoga's Brian White in a note to clients Monday, taking his cue from an AppleInsider report that Apple (AAPL) began shipping white iPhones to MOREPhilip Elmer-DeWitt - Apr 25, 2011 11:46 AM ET
What is it with the Chinese and their iPhones?
The signs were everywhere: The steady stream of human traffic from New York's Chinatown to the Fifth Avenue Apple Store. The housewives arrested at the Hong Kong crossing with dozens of units strapped under their dresses. The scalper fights that broke out when Apple's Beijing store briefly lifted its two-iPhones-per-customer limit.
No wonder Apple (AAPL) decided several years ago to make China MOREPhilip Elmer-DeWitt - Jan 22, 2011 6:31 AM ET
|Regulators pave way for Internet "fast lane" with net neutrality rules|
|What stumps Warren Buffett? Minimum wage|
|Facebook profit triples on mobile growth|
|Apple shares soar on increased buyback|
|Analysts offer no apologies for missing Apple's Q2 2014 earnings beat|