Analyst price targets for Apple (AAPL) have skyrocketed, some to $1,001. Still I'd like to know: Where were they back in 2008 when Apple was trading at $90 and no one wanted to touch it? Hey, that was then and this is now, and Apple is going to a trillion-dollar market cap. A remarkable turn of events. Hey, I'm glad they're on board.
More important, analyst estimates are rapidly rising. The analyst community discovered Apple's going to make money hand over fist. Earnings estimates keep getting raised. Over the last 3 months, consensus forecasts for fiscal year 2012 have increased $100 million a day. Estimates for 2012 have ballooned by $8.7 billion just over the last 90 days, close to the amount of money Google (GOOG) made all last year.
Imagine: Analysts literally dug up a near-Google worth of earnings for 2012 in 90 days. Earnings that weren't to be found when they made their forecasts back in January. Quite a find. $8.7 billion. Profits the gaggle of analysts didn't see them coming back in early January.
Where were those profits hiding? In the attic? How does one hide $8.7 billion in profits? It's like a group of archaeologists just dug up Atlantis in Pennsylvania. Amazing. Still, I do love their find. 2012 is shaping up to be an iEverything bonanza.
Only one slight problem: The group is way behind the curve for 2013. True, they've been bumping up 2013 estimates over the last 3 months by $11 a share, or $10 billion. But it's not enough: Earnings for 2013 are only 14% higher than 2012. Supercharged earnings and revenue growth in 2012. Mundane growth for 2013. Under the S&P 500's expected growth. Come on.
Click to enlarge.
Courtesy of Yahoo.com.
This is really very frustrating. It's a mathematical law. If you increase 2012 estimates by $8.7 billion and 2013 estimates by only $10 billion, you've set yourself up again for failure. Analysts have left themselves in a bind. What's become of Apple's 2013 growth?
I know there are a slew of Apple naysayers out there noting that pitiful 14% growth predicted by the very enthusiastic analyst bunch. I know the analysts community aren't figuring for an Apple growth deceleration. Not after predicting a 60% rise in 2012 earnings. Surely the analysts don't expect Apple to shut down on October 1?
Note to analysts: Please correct your 2013 numbers. If you don't, you'll need to unearth another $20 billion in Apple profits on the fly. That's the equivalent of a year's worth of Microsoft (MSFT) profits. Time to sharpen those pencils, guys! Time to raise those 2013 estimates.
Disclosure: I am long AAPL.
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