Today, I am publishing an updated price target for Apple of $790 per share. This target forecasts a 60% gain in the share price from the closing price of $493.42 on Friday, February 10, 2012. I consider this price target to be moderate based on the expectations of strong revenue and earnings growth over the next 12 months and the low valuation range in which the shares currently trade, despite the recent run-up in price.
Over the past 10 trading days, the shares have risen about 10% from the closing price of $447.28 on January 27th to Friday's closing price of $493.42. However, this recent gain is a market response to Apple's strong December quarter outcome and does not represent a new valuation range for the shares. The shares continue to trade at a significant discount to near-term growth.
Apple's Current Valuation
The graph below illustrates, despite the near 100% growth in earnings per share over the most recent four fiscal quarters, at Friday's closing price the shares have risen only 43% in value since February 1, 2011.
Over the past 12 months the company's cash and marketable securities per share has continued to rise as a percentage of the share price. At Friday's closing price, cash and marketable securities per share represented 21% of the share price.