Apple might have had a blustery week on the stock market, but Goldman Sachs is still confident about the prospects for the company's shares and has boosted its 12-month price target to $750 from $700, recommending that people invest in Apple stock in the run up to the company's financial results announcement next Tuesday night.
Goldman Sachs analyst Bill Shope told investors: "Despite recent volatility, we continue to believe Apple's shares are very attractive at current levels. It remains our top pick, and we'd be buyers ahead of March-quarter results." Shope's target of $750 is still behind the 12-month target of $1,001 set by Piper Jaffrey analyst Gene Munster and Topeka Capital Market's Brian White.
Shope has high hopes for the quarter based on the refreshed iPad, lower-priced iPad 2, and Apple's ramped iPhone distribution channel. He expects that Apple to announce strong sales of iPad and iPhone for the quarter. He estimates that Apple sold approximately 31.1 million iPhones in the quarter, along with 12.5 million iPads.
The analyst expects Mac sales to be "fairly lackluster," but he still estimates sales of 4.3 million Macs, despite the fact that people are thought to be holding off purchasing new Macs as upgrades to the MacBook Pro and iMac are expected soon. The last Mac to be updated was the MacBook Pro in October 2011. The iMac was last updated in May 2011. The MacBook Air and Mac mini were last updated in July 2011. The Mac Pro, almost forgotten, was last updated in July 2010. Shope expects Mac sales to rebound quickly over the coming months, as Apple is expected to revamp its product lineup with new laptops and desktops.
Shope suggests that the next quarter will be even better, dispelling concerns that the June quarter will be "catalyst-light". "The June quarter is when many of the recent catalysts begin to fully manifest into earnings power," he writes, according to Apple Insider.
Apple's stock surged again last night, having already rebounded on Tuesday from a several-day slump, gaining $29.57 to $609.70 by the market's close, up 5.1 per cent from its opening price on Tuesday. Apple's share price declined rapidly over the past week, from the height of $636.23 a share on Monday 9 April to $580.13 a share a week later on 16 April, that's almost a 9 per cent decrease.
However, the stock is still up compared to where it was this time last year: on 15 April 2011 the share price was $327.46, so Monday's low of $580.13 is still a 77.161 per cent increase 12 months later.
Apple will announce its Q2 FY12 earnings on Tuesday 24 April. The company will host its usual conference call with analysts and shareholders at 9pm BST (2pm PT). The call will be streamed via Apple's website, we will also run our usual analysis on the Macworld website during the call.