There is a new Apple target as of this morning. Growing sales of iPad computer tablets in the corporate market and an expected new iPhone 5 that runs on 4G LTE networks are two reasons why Morgan Stanley analyst Katy Huberty says Apple shares could hit $960 in 2013.
In a research report out early today, Huberty raised her 2012 price target on the stock to 720 from 515. Apple (AAPL) shares were up 2.5% in early trading Wednesday, in what would be a sixth consecutive trading day on the upside, to near 582.
Citing demand for the new iPad 3, Canaccord Genuity analyst Michael Walkley on Wednesday raised his 2012 target to 710.
Huberty joined the analysts in forecasting that cash-rich Apple will start paying a dividend.
“Apple is trading roughly in line with large cap technology peers and the S&P 500, despite a far more attractive growth profile. IBM (IBM), Oracle (ORCL), Microsoft (MSFT) andCisco (CSCO) offer investors a 1.6% dividend yield on average, a range which we believe Apple will match or beat at some point this year,” says Huberty.
Huberty says a 960 valuation is realistic in 2013 because of corporate iPad sales and a 4G LTE-capable iPhone 5, as well as growth in emerging markets Brazil and China.
The country’s two smaller wireless firms, China Unicom and China Telecom, now sell the iPhone — which faces stiff competition in China from devices that use Google’s Android operating system.
Apple will have a hard time matching its current rapid growth, says Huberty. She says Apple’s 2013 revenue will rise 36%, compared with 56% growth in 2012 and 68% in 2011.
Huberty says Brazil could emerge as a big growth driver for Apple, based on comments by Apple CEO Tim Cook. She says iPhone demand “could double or triple in Brazil.”
“We believe lower iPhone prices in Brazil could be a near-term catalyst,” she wrote. “Hon Hai, Apple’s primary iPhone assembler, just opened its factory in Brazil. We believe this could lead to cheaper iPhones as Apple will not have to pay a hefty import tax in Brazil if final assembly of the device is done domestically.”
Huberty’s bear valuation says Apple’s valuation could fall to 405 per share in 2013 if competition sharply lowers smartphone and tablet prices.
As with any publicly traded company, this is all just speculation, but at the rate Apple is rising and the steady release of products over the next year we do not see a decline coming anytime soon.