Apple Inc. shares are “extremely undervalued” and may reach $1,200 each as sales of iPhones and iPads are growing strongly, according to Henderson Global Investors Ltd.
“Apple is becoming cheaper as earnings had been growing faster than its share price,” Stuart O’Gorman, London-based director of technology research at Henderson, said in Singapore. “Our target price for Apple is $1,200,” he said without specifying a time frame. Henderson oversees about $100 billion in assets globally and Apple is the biggest holding in its technology fund.
Annual net income at the world’s largest company by market value grew seven times from September 2007 to September 2011, data compiled by Bloomberg showed. The share price increased 148 percent, according to the data.
The stock touched a record intraday high of $644 on April 10 after analysts from Piper Jaffray Cos. and Topeka Capital Markets said demand for the iPhone and iPad, growth in China and potential debut of a new television product would propel the shares above $1,000, making Apple the first $1 trillion U.S. company. The stock fell 0.2 percent to $608.34 in New York yesterday.
Valuations for Apple aren’t justified when compared to other global brands like Nike Inc., O’Gorman said. Apple trades at 13.6 times estimated earnings, compared to 20.2 times for Nike, the world’s biggest maker of sporting goods, according to data compiled by Bloomberg.
“Is Nike a better brand than Apple? Is Nike a better company than Apple?,” O’Gorman asked.
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