Apple to Generate Highest Annual Net Income Ever in History as a Public Company: Wall Street Analyst
Apple, the world’s leading public company in smartphone and tablet market, can generate the highest annual income ever in the history for trading year 2012 as a publically traded company, recently guessed by one of the prominent Wall Street analyst- Brian White at Topeka Capital Markets. In his recent advice note to investors posted on Monday, he notes that according to his meetings with many market experts and several discussions with market analysts, a $500 billion market cap is going to set as a barrier to further price upside at companies in the past. Moreover, it is speculated in the Wall Street that the $500 billion market cap threshold is a “barrier” for stocks. He further added that the concerned experts believe that Apple can face the similar situation which would thwart the company from approaching much further past the $500 billion mark. Notably, as of Monday morning, Apple’s market cap was touching to $545 billion. According to some Wall Street experts, any company which exceeds to the landmark of $500 billion in market capitalization likely faces the considerable decline in growth at that point. But White has a firm belief that Apple isn’t the company falling under this typical rule, as Apple’s market cap potential is in trillions of dollars, not billions.
White notes; We went back and analyzed five U.S.-based companies that at one time enjoyed market capitalizations of (about) $500 billion or more, but found little similarities with Apple. Those five companies were Cisco Systems, Exxon-Mobile, General Electric, Intel, and Microsoft. With the exception of Exxon, these companies had rich price-to-earnings ratios when they crossed the $500 billion mark, and the tech companies had what White called “monopoly-like market share positions.
But it doesn’t apply on Apple, as Apple still does not have a monopoly like hold on most markets where it competes like China and India. Instead, there is plethora of room for expansion in the thriving smartphone market.
Microsoft held over 90% market share for PC operating systems at the peak cap, while Cisco had over 70% share in the networking market and Intel had over 80% of the PC processor market,” White said. “By comparison, IDC estimates that Apple held just 4.7% of the PC market in (the first quarter of 2012) and 8.8% share in the mobile phone market.
Though one can say that Apple’s iPad has a full dominance over tablet market, with an expected 68% share of shipments in the Q1 2012, but White hints that it’s a market category that was invented by Apple itself. On the basis of above points, White clearly hopes that Apple has strong potential of generating highest profits in calendar year 2012 to become the first publicly traded company ever in history with such a huge profits.
White predicts that Apple’s net income will be six times higher than the “Big 03″ technology companies (on individual basis) that have surpassed a $500 billion market cap. Moreover, to its comparatively low market share, Apple stock is presently trading at just 8.4 times White’s estimations for calendar year 2013 earnings per share, apart from cash.
In contrast, the three technology companies that have beaten the $500 billion threshold — Microsoft, Intel and Cisco — had price-to-earnings ratios of over 80 times.
Via: AppleInsiderApple, Apple TV, iPad, iPhone, iPod Touch, Mac