The iPhone 5 hasn’t been introduced to the public, but there is already speculation that there may be some potential supply issues. People are concerned that there won’t be enough new iPhones to meet the demand at first. The good news is that this might have a positive impact.
Evercore Partners analyst Rob Chira says that Apple Inc. (NASDAQ:AAPL)’s stocks generally perform 2.2 times better after such constraints. The reason for a positive impact? There are several as follows:
1- Investors see value in the product and that people are willing to wait for a quality product.
2- If the demand is greater than the supply, investors can imagine the potential if the supply number had been higher.
It’s also predicted that Apple Inc. (NASDAQ:AAPL) will introduce a new generation of iPads, which may include a 7.85 inch iPad mini, in addition to another flagship 9.7 inch iPad.
Apple Inc. (NASDAQ:AAPL)’s valuation price target is at $800. It’s the equivalent of 14x P/E(12 time ex-cash) on CY13E and 10x EV/FCF. The few risks Apple has includes exposure to premium-priced consumer IT tech markets and revenue/profit concentration over a small handful of key products. Other potential pitfalls include pressure in pricing and margin from competitors throughout the world.
The good news is that things are really looking up for Apple. Even if there is a minor supply issue, I think Apple Inc. (NASDAQ:AAPL) will still rake in more than enough. Their solid reputation as a company, and technologically advanced products have brought them the success they enjoy today, and I really don’t think that’s going to change in the immediate future. As long as they continue to roll out the products and software that’s in demand, it’s possible that they will have a bright future. That said, the future is never set in stone and nobody knows what it holds for Apple.
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