The wait is over. Shares of Apple, Inc.
(NASDAQ:AAPL) topped $500 for the first time when it opened its
regular trading session on Nasdaq.
The event was widely anticipated for
the past couple of weeks as shares were touching new highs every now
and then. They are rallying since June 2011 when it was trading
around $315 and topped $400 in October.
After a brief pullback in early
October, tied to negative investor sentiment over the death of its
founder Steve Jobs, shares have constantly been on an uptrend. Since
Nov. 25, shares have gained about 36 percent and that is an
impressive rally by any measure.
Apple gained 17 percent since its
announcement of quarterly results on Jan 24 and has outperformed
Nasdaq 100 and S&P 500 index. Since Jan.24, Nasdaq 100 has
increased by about 5 percent and S&P 500 index rose 2 percent.
Cupertino, California-based Apple also
topped Exxon Mobil Corp. (NYSE:XOM) as the most valuable company in
the world. Currently, Apple's market capitalization stands at $466
billion, compared to Exxon Mobil's $398 billion.
On Jan.24, Apple delivered blow-out
results. The company earned $13.87 per share in the first quarter,
handily topping analysts' expectations of $10.08 per share. Sales
rose to $46.33 billion from $26.7 billion, ahead of consensus of
$38.8 billion. iPhone sales soared 128 percent to 37.04 million
units, topping expectations of sales of around 30 million to 32
million. iPad sales jumped 111 percent to 15.43 million.
For the second quarter, Apple sees
earnings per share of $8.50 on sales of $32.5 billion. Analysts
expect the company to earn $9.39 per share on sales of $34.81
billion.
Apple Still Cheap at $500
Yes, you read it right. Apple shares
are still cheap at $500 as analysts' mean price target is $568.49,
median target is $599 and high target is $700. Meanwhile, majority of
the analysts have set price target of at least $600 on Apple stock,
according to Thomson Reuters.
On the valuation front, Apple shares
are trading at 11.65 times its expected 2012 earnings . Meanwhile,
industry leaders such as Google (NASDAQ:GOOG) is trading at 14.46
times, Hewlett-Packard (NYSE:HPQ) is trading at $7.12 times and
Microsoft (NASDAQ:MSFT) is trading at 11.38 times.
On the fundamentals front, Apple is
expected to report 47 growth in earnings per share and 41 growth in
sales for the second quarter. For the full year, the company's
earnings are estimated to rise 53 percent and sales are projected to
grow 45 percent.
There is lot of upside potential for
Apple shares and the best days are still ahead as the company is set
to launch its iPad 3 in March and is expected to upgrade its iPhone
in the fall. In addition, Apple is also expected to release iTV by
the end of 2012.
Last but not the least, Apple may
declare a dividend during 2012 as its cash pile is set to cross $100
billion and is feeling the pressure to enhance shareholder returns.
If Apple declares dividend or buyback shares,it would further boost
investor sentiment.
If all goes well, there would be no
looking back for Apple shares, which are currently up 1.32 percent,
or $6.51 at $499.93 on Nasdaq.