Apple (Ticker Symbol: AAPL) closed on Tuesday at $239.54 per share while setting a new all-time high of $240.24 in intra-day activity. No matter the number of Apple iPads sold in the first few days following the product's release last Saturday, the direction AAPL will follow over the next few weeks has more to do with the anticipated March quarter results to be released on April 20th than it has to do with sales of the company's latest hardware device. While a successful launch of the iPad will no doubt benefit the share price, an impressive March quarter will positively impact the share price even more.
At today's closing price Apple is trading at about 23.33 times trailing 12-month earnings per share of $10.27. I expect earnings per share of $2.75 or more for the March quarter. Using $2.75 per share for this example, Apple's trailing 12-month earnings would rise to $11.20 per share. Maintaining a price to earnings multiple of about 23, based on Match quarter results the share price should reach $258 or more per share by the end of April 2010. This suggests a further 7.5% rise in the share price from today's close by the end of this month.
On Thursday Apple is expected to announce iPhone 4.0 software for its iPhone OS-equipped devices. While news of the OS update might move the share price higher, this news might have a more subtle effect of helping the shares maintain recent gains ahead of the March quarter earnings release.