Now that Apple's market capitalization has climbed to $765 billion, a record for any publicly-held U.S. corporation, analysts are beginning to talk about $1 trillion.
That would represent a 31 percent increase. Assuming the number of shares outstanding remains the same, that would also mean a 31 percent gain for Apple shares, to $174 from Monday's close of $133.
The highest analyst price target now is First Shanghai Securities' $165,
according to the Financial Times.
Activist investor Carl Icahn is a believer, posting a letter on his web site saying that Apple is worth $216 a share.
Investors obviously like what they see when it comes to soaring iPhone sales, development of new products, share buybacks and dividend increases. Apple stock has generated a whopping 80 percent return over the last year.
A $1 trillion market-cap "is possible in the next couple of years, and the reason I think it has this potential is really because the multiple investors are willing to pay for [Apple] is expanding," James Gautrey, a technology specialist at Schroders Investment Management, told the FT.
Apple has a forward price-earnings ratio of only 14, compared to 17.55 for the S&P 500 index.
Citigroup equity analyst Jim Suva offers several reasons why Apple's share-price ascent can continue. His views came in
a commentary obtained by Forbes.
- Consumers are upgrading their phones more frequently. That's obviously good news for iPhone sales, which could total 200 million this year, he says.
- Profit margins can keep rising. In the quarter ended Dec. 27, Apple posted a margin of 39.9 percent, up from 37.9 percent a year earlier.
- Apple Pay and Passbook may pan out big-time. Apple may enjoy "significant innovation that could lead to additional economics," Suva says.
- Apple can broaden from its consumer orientation. "We foresee Apple investing efforts to make new traction in the corporate environment," he writes.
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