The stock market has been tanking all week, but that's not keeping financial firm Needham & Co. from being bullish on Apple. The company raised its price target for AAPL from US$450 to $540.
So why the big jump? Needham's Charlie Wolf notes that the firm adjusted how it values Apple's different businesses and product lines. The iPad, for example, is now estimated to contribute about 12.2 percent to the value of Apple stock. That's up from the previous estimate, based on a new assumption that the iPad will continue to capture a larger share of the tablet market that Needham initially thought.
The Mac is also adding to the party, thanks in part to a halo effect from the iPad. As more buyers become entranced with the iPad, they're more likely to purchase Macs in the future. The Mac product line is now valued at about 11.8 percent of AAPL's value. Likewise, iTunes has been bumped in importance as a contributing factor to the stock price (now 5.1 percent) thanks to the growth of the App Store.
The biggest contributor? The iPhone, which provides almost 49.2 percent of the value of each share of Apple stock or about $266. That's also seen as a risk factor, since even a small decrease in growth of iPhone sales could have a huge impact on Apple stock price.
Last but not least, Apple's cash hoard adds to the stock price value, contributing about 14.8 percent of the value. However you look at Apple, the company's performance in troubled financial times has so far been nothing less than stellar.
Needham & Co. raises price target for AAPL originally appeared on TUAW - The Unofficial Apple Weblog on Fri, 05 Aug 2011 12:00:00 EST. Please see our terms for use of feeds.
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