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Expert: Apple Stock to Hit $270 in 3-6 Months

Today, Quentin Fottrell over at MarketWatch has an amazing interview with Edward Zabitsky, CEO of ACI Research in Toronto. Zabitsky is one of the earliest bears on Apple (NASDAQ:AAPL) stock.

Did he call a top in late 2012 at $700, as Samsung (PINK:SSNLF) and other devices powered by Google (NASDAQ:GOOG) Android were getting in on the action?

Nope.

Did he sound the alarm in 2011 when Amazon (NASDAQ:AMZN) rolled out its first incarnation of the Kindle Fire as a cheap iPad alternative?

Nuh uh.

It’s not about BlackBerry (NASDAQ:BBRY) or Microsoft (NASDAQ:MSFT), either.

He rated Apple stock a “sell” in 2010 — at around $200 a share.

You might mock Zabitsky for being too early to be right, since Apple’s stock price still is double what it was when he made that call. But Fottrell’s interview reveals some good insights as to the challenges Apple started facing several years ago and how those risks are finally coming home to roost.

Zabitsky’s current outlook for Apple stock is for $270 a share, which he says is “formally a one-year target, but in 3 to 6 months we’re going to see that play out.”

His reasons:

  • “The reason I started to make noise [in 2010] was the rise of Samsung. If you say that now, it’s not challenged.”
  • “Apple TV: Where is it?”
  • “China Mobile: Every excuse [for not partnering with it] is gone.”
  • “People woke up last year, looked at their iPhones and realized that everything that they wanted to do on that phone they could do anywhere else on any of the major software ecosystems.”
  • “I was surprised when the stock rallied in anticipation of the iPhone 5. It was obvious that Samsung was making inroads.”
  • “The point is to be loudest at the points where you have more near-term information which gets the clients to act. When the stock is going in the right direction everyone makes a lot of noise. When it goes in the opposite direction, they hide. But the day you need the research and long-term fundamentals is when they’re panicking.”

Anyway, the full interview in Q&A form is excellent, so check it out over at MarketWatch for more insight on Apple stock and its price outlook.

Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing he did not own a position in any of the stocks named here. 

Editor’s note: A previous version of this story incorrectly identified the price target for Apple.

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Comments
  • IHateDumbAnalysts

    Giving importance to people just because the trend is in their direction is foolish. Apple is still making billions and had a record last quarter. Judging a company’s health by it’s stock health is for people who do not understand fundamentals

    • http://www.facebook.com/dmelges Dave Melges

      I think most people are judging this company based on it’s lack of innovation in the last 3 years. Incremental improvements at best….

      They launched a great smartphone, owned the market and lost it.

      They launched a great tablet computer, owned the market, and are rapidly losing it.

      They built the gigantor pile of money with iTunes, and used that customer base (who felt trapped because all their media was there) to leverage ipod, then iphone, then ipad sales….but…iTunes doesn’t work that way anymore (because Apple got caught ripping people off with DRM policies) and there is no NEXT MUST-HAVE PRODUCT to build off iTunes within sight.

      This isn’t complicated…the mechanics that made Apple, are no longer there. They’re bleeding customers, and all they have planned, as far as anyone knows, is band-aids, not major surgery.

      They don’t need Steve Jobs…there is literally NOTHING that can create the atmosphere they started with iTunes. Without offering VARIETY (which they belligerently refuse to do) and economy (which they arrogantly refuse to do) they’re going to fail. If they change their policies, they don’t fail, but they DO become just another big electronics company…..never again the behemoth. That day is over.

      • Apple Faith

        Why make a new product at a time when your best products are making money hand over fist. Apple was focused on making a great product better thus making a boat load more money. Apple has some of the best talent on earth and if they don’t they can certainly buy it. When the time or need comes to be innovative again they will certainly shine.

        • http://www.facebook.com/profile.php?id=122607822 Sebastian Strobel

          What a near-sighted comment. What others in this thread are addressing is Apple’s future. Yes, Apple makes billions every year with their current product line but it is not appropriate to suggest that they should only innovate ‘when the time or need comes’. What has made them this great to date is their desire to build products that create new markets or significantly improve existing ones. In this sense, they are leaders. If Apple is to release only an incremental change to their biggest money maker, the iPhone, providing nothing new, exciting or even different, there will be questions arising about the company’s ambition it was once founded upon.

      • http://www.mhoffbauer.com Marius Hoffbauer

        They never really “owned” the market in smartphones. There may have been a month or so where they were the top selling smartphone maker, but pretending that was a stranglehold is ridiculous. Before that very brief moment there were RIM and Nokia with larger market share, and shortly after Samsung became the top seller.

        The fundamental problem however is that you just consider market share, as if that has any intrinsic value. The fact is that both the iPhone and the iPad have been growing at rapid rates. Approximately doubling their unit sales every year.

        Your iTunes comment is somewhat backwards. It’s the iPod and iPhone that created and grew the iTunes customer base, not the other way around. Ecosystem lock in is a thing, of course, and it is a thing that works. Every other manufacturer as well as Google is trying to lock their customers in with their offerings. However non with as much success as Apple.

        Your conjecture about future products is odd. How do you know there’s no next must-have product? No one knew the iPod would be a huge hit before it was announced and became one…same goes for the iPhone and the iPad. Apple does not do it’s R&D in public. If they were working on a product like Google Glass, even if it was in the same stage or more advanced, they would not be talking about it. At best we’d hear some rumors.

        Even if they had no future products at all. There is gigantic potential in them just riding out their current growth products (iPhone, iPad, and even Mac). It could easily more than double in size again, just by executing these products well. I wrote a blog post conjecturing about the potential of the iPhone line in specific, considering rumors of a larger, as well as a cheaper version: http://noiseandmultiplication.com/blog/2013/3/8/the-potential-of-the-iphone

        You say Apple is “Bleeding Customers”. There is no evidence for that at all. Last quarter they sold more iPhones than ever, they sold more iPads than ever. They are gaining customers. That’s a fact.

        In conclusion, basically everything you said in your post is completely wrong.

        • michael suozzi

          You forgot to mention three things.
          1) Worlds second most valuable brand & biggest in market Cap.
          2) Makes more money in retail PSF than anyone on the planet.
          3) Commands 70% of internet use and 90% of online spending.

      • michael suozzi

        I won’t insult you; but clearly you don’t understand AAPL’s “place”.
        The reasons you list alone, if acted upon by many luxury brands (and AAPL is clearly the luxury brand in electrics and phones) it would lead to their demise.
        Tell Rolex to change their classic Oyster because it lacks innovation.
        Tell Porsche to overhaul the 911 Carrera because the same basic design is boring.
        These are just two examples of radical change in a luxury product that would lead to certain disaster. As with Porsche, Rolex and AAPL; looking at the re-sale prices & retained value over time
        It supports my theory.
        There is no resale market, of any consequence, for other phones. Even if you go to a site like Overstock; all they sell is Samsung and other cheap discounted products. NO APPL.

  • Guest

    I am a huge fan of apple and bought their ipod/iphone/ipad. I would agree with the research above because even I never thought of getting tired of apple which I am getting now based on their zero innovation since Steve died. I am getting frustrated with their devices not being able to use flash/usb. Why use iPad if it cannot give a me great web experience. Believe me I always hated Android and always have been a great apple follower but I am begining to think may be I should give Android a try which does offer more in less price.

  • ihate apple

    Im glad to see apple going down. Its about time John Q Public reilizes that apple just cares about thier own profit margin and not the consumer.

  • http://www.facebook.com/mike.muoio.73 Mike Muoio

    AAPL was stupid before Jobs came back for a heck of a run. He has passed and all is back to normal.

  • ballchinian5

    Apple SUX. Their new version of iTunes disables the wi-fi drivers on my XP machine and so I had to uninstall it months ago. Apple won’t even let me download an old version to access the content I’ve already paid for. The company is going the way of K-Mart.

    • michael suozzi

      Go to an AAPL store where they will fix your problem & kiss your ass.
      Try that with Samsung or others………Oh I forgot; they have no stores.
      LOL

      • Baz

        You do realise don’t you Michael that you don’t get nothing for nothing with any business? You do understand that one of the reasons why you are paying inflated prices for underspecced and overrated Apple products is because they need the money to pay for the Apple stores that you obviously frequent, as well as the staff who work in there to “kiss your ass” as you so eloquently put it.

  • Jason Hogg

    Knob rot…missed a 500dollar rallying event now calls low…research check your stool…ass

  • bobo

    Apple products are exceptionally good, I never had any freezing problems with the software etc. I use both samsung galaxy 3 and iPhone 4s at the moment, I can clearly say iphone is a far better product. I still enjoy it and appreciate the quality of my iphone4s , I dont want to change my 4s because it is perfect to hold, the weight and the look for me. I like to feel the weight and the presence of 4s, its not too heavy or not to light just right for me. Fits perfectly in my pocket too. I find the iPad 10 inch also perfect, I did buy a 7 inch samsung tablet, ipad is miles better in quality. In my opinion 10 inch tablet is perfect to carry around as a decent viewable screen. So 4s is perfect for me for a phone and ipad 10inch completes the picture for the internet etc. Not to mention ios is excellent and everything I need stored in the cloud for any of my apple products. I know its not cheap but as I said if you can afford it samsung is always a second coming, I would go for gold which is apple.

  • erez

    Aapl dies with Steve jobs

  • http://twitter.com/EliteCCTV Elite CCTV Security

    At $270 that would put apple’s pe multiple at what 4x forward earnings?

  • guest

    So some ‘expert’ rated Aapl a sell in 2010 when the stock was $200 a share…and now we’re supposed to take him seriously? Glad I didn’t listen to that expertise back then.