Why Apple shares could almost double

by Michael Tarsala

Cody Willard at MarketWatch is not a technical guy.

But he thinks Apple (AAPL) is going to break out and eventually hit $1000 by 2015.

He’s not the only one to make a similarly bold prediction. Back in April, Gene Munster at Piper Jaffray said Apple would get to $1000 a share by 2014, and become the first $1 trillion market cap company. And not to be out-done, Topeka Capital Management set a $1001 target price on Apple by April of next year.

I was never one to put stock in price targets, whether they’re based on intrinsic valuation, a sum-of-the-parts analysis or in some cases based on price patterns. Results would not be very favorable if someone was to do a study on the accuracy of analyst prognostications.

Yet I still read what analysts and commentators have to say pretty much every day for the following reasons:

  • There are things that others know that I do not, especially as it relates to unfolding corporate situations, new products or new financial details that come from analyst meetings. I am always looking to glean new facts.
  • I love a well-argued thesis, whether I happen to agree with it or not. It has to be based on multiple supporting facts and the KISS principle (easy to understand).
  • The track record of the analyst also is important; for that simple reason, some opinions carry a lot more weight than others.

As it relates to Apple:  Beyond the headline-grabbing number, Willard makes two strong arguments:

— He believes there’s a case for the stock to get to $1000 within his timeframe by building out its iPad and iPhone franchises; he doesn’t see the need for Apple to release a whole new blockbuster product to get there.

— He backs up my belief that Apple faces few threats from the recent Google (GOOG) and Microsoft (MSFT) tablet launches, mostly with this comment:

Mountain View is so threatened by Apple’s domination of the tablet space that they’re willing to tick off hardware partners and put out their own device. Why would they do that? Bottom line it’s because Android is totally fragmented and totally sucks, and without a flagship device it’s not going to survive the next generation of the ipad.

Check out his full story here.


Photo by: Rob Boudon