How exactly did Brian White come up with that number?
When last we heard from Ticonderoga’s Brian White, a few hours after Apple AAPL reported its Q1 2012 earnings, he was reiterating the 12-month price target he had set the previous July: “Apple crushes even the most optimistic expectations,” he wrote. “$666 here we come.”
Two days later, Ticonderoga closed up shop.
On Monday White resurfaced at a new firm, Topeka Capital, with a new Street-high price target guaranteed to draw attention to itself: $1,001.
“Apple fever is spreading like a wildfire around the world,” he wrote in Monday’s note to clients, his enthusiasm for the company undiminished, “and we see no end in sight.”
What’s odd about White’s new price target — which is at least $201 higher than the most bullish of his colleagues — is that the model supporting it is actually rather modest.
We know of four professional analysts who have called for higher Q2 revenues than White’s $37.02 billion, nine with higher EPS numbers than his $10.06, and 15 with higher iPhone unit sales estimates than his 29.64 million. The only number that sticks out in White’s spreadsheet is his estimate of 14.47 million iPads, which is higher even than all but two of the most bullish independent analysts.
So how did he get to $1001? By factoring in Apple’s cash holdings, anticipating continued breakneck growth and using a P/E ratio from 2006-2010:
Investors must have liked the sound of that. Apple’s shares closed at $618.63, up $19.08 (3.18%) for the day.