When you think of Apple’s string of successful product launches, the word “underperform” doesn’t immediately enter your vocabulary. However, one Wall Street analyst believes the Cupertino, Calif. company has plenty of room for growth. The iPhone maker’s stock has risen 37 percent in 2010, but is a far cry from the 75 percent earnings consensus from consumers. In fact, the Oppenheimer analyst expects Apple will report Oct. 18 a “blowout” quarter and sales of at least 12 million iPhones.
“The prime factor behind the underperformance of the stock relative to the fundamentals seem to be investor concern about Apple’s size,” Yair Reiner told investors Friday. “Bottom line, as big as Apple is today, it seems destined to get much bigger,” he adds. On that note, Oppenheimer raised its 12-to-18-month price target for Apple stock to $345 on expectations of $19.9 billion in revenue – up from previously forecast $18.5 billion.
Additionally, Reiner upped his prediction for iPhone sales to 12 million, a steep increase from his previous 10.5 million units. He also hiked his iPad sales expectations to 4.5 million tablets sold, up from 3.9 million sales. Even so, the analyst warned his numbers may be too conservative.
“We’re still taking our first baby steps into the iOS world in which seamless connectivity to cloud services through purpose-built apps lay waste to conventional modes of broadcasting, marketing, distribution, and consuming every manner of video, audio and printed material,” he predicted.
Such boundless optimism seems to have replaced Reiner’s once-cautious words about the impact this summer’s ‘Antennagate’ episode might have on Apple’s bottom-line. However, there might be one cloud in the sky for Apple. The analyst does not agree with other observers that we’ll see a Verizon iPhone in early 2011. Neither the carrier nor Apple have a reason to ink any deal soon, he warns.