Piper Jaffray Analyst: Apple Shares Headed to $1,000

Sunday, 03 Jun 2012 11:39 AM

By Dan Weil

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Apple Inc.’s market capitalization will rise inexorably to $1 trillion from the recent level of $525 billion, says Gene Munster, senior technology analyst at Piper Jaffray.

That would entail a surge by the share price to more than $1,000 from Friday's late price of about $561.

What’s going to get Apple to that level is its superior “ecosystem” compared to its competitors, Munster tells Steve Forbes, chairman of Forbes Media.

Editor's Note:Sept. 18 Cover-Up Is a Final Turning for America

“To give you an example, when the iPod came out there were a lot of competitors, and all of them had better features,” he says.

“People really thought that was going to be the end of iPod. But ultimately it was the connection between the iTunes music store and the iPod, that hardware-software connection, that created the first Apple ecosystem.”

That same ecosystem was repeated in the iPhone and the iPad and will be in Apple television too, Munster says.

To keep up with Apple, “competitors need to replicate the ecosystem, which is virtually impossible at this time.”

Apple’s market cap could reach the magic $1 trillion level in 2014, Munster says. That’s based on his earnings estimates for 2015, assuming a price-earnings ratio of only 12.

Many other experts are bullish on Apple, too.

Morningstar analyst Michael Holt, like Munster, stresses Apple’s successful ecosystem. “Apple is transcending the risks of the classic product cycle,” Holt writes in a report on Morningstar.com.

Editor's Note:Sept. 18 Cover-Up Is a Final Turning for America



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