February 6, 2015MarcoTradeComments Off on Follow-up on AAPL Trade
On this post from January 15th, I suggested purchasing Apple ahead of earnings given a bullish pattern that was emerging on its chart. At the time Apple was trading around $108 and the buy point at around $115 was triggered just following the earnings release. Do not despair if you did not buy in then. Apple is still sitting in buy range at $119.94 and it is just starting what will be a great run for 2015.
Given the blowout earnings plus what is in the pipeline, AAPL at a P/E of 16 is extremely cheap at this level. Looking at projected 2015 earnings of $8.5 per share, assuming no upward revisions/results and keeping the multiple at 16, we get a target price of $136 by year end. My target price range is between $160 and $180 by year end and this is why. Earnings will be revised upwards and it is not unconceivable to assume a $9.50 per share and a slightly higher multiple of 17 given the fantastic earnings growth rate of the company. This sets the low range of our price target at $161.5. If the street gets a little more enthusiastic about the iWatch and ApplePay then $180 is not out of the question. Summing up – buy AAPL now that hasn’t yet started its monstrous run. You’ll thank me later.