But the fact that investors expect a Verizon iPhone in early 2011 makes its analyst nervous
In a note to clients issued early Friday, Oppenheimer’s Yair Reiner addresses the yawning disconnect between Apple’s AAPL fundamentals — the underlying strength of its business — and its share price.
Why the 38 point discrepancy? Reiner believes the prime factor has been investors’ nervousness about Apple’s size — both in absolute terms and as a percentage of their holdings. But he thinks the last six months may have prepared portfolio managers to get over this “psychological hump.” And he thinks the blowout September quarter he’s expecting could provide what he calls “the catalytic push in the rump for an overdue catch-up trade.”
Reiner has raised his iPhone and iPad unit sales estimates (to 12 million and 4.5 million, respectively) as well as his Apple price target (to $345 from $330) and is advising clients to buy the stock in advance of the company’s Oct. 18 earnings report. Apple, he says, is “not too big to blow it out.”
Among the professional analyst who track Apple, Reiner’s estimates for Q3 were the most accurate. He was outclassed, however, by a couple of amateurs. See Earnings Smackdown: The best and worst Apple analysts.
[Follow Philip Elmer-DeWitt on Twitter @philiped]