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Here's Why Apple Inc. Shares Will Soar to $650

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While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Apple (NASDAQ: AAPL  ) gained slightly in pre-market trading Thursday after Deutsche Bank initiated coverage on the consumer electronics gorilla with a buy rating.

So what: Along with the bullish call, analyst Sherri Scribner planted a price target of $650 on the stock, representing about 23% worth of upside to yesterday's close. So while momentum traders might be turned off by Apple's sluggish price action in recent months, Scribner's call could reflect a growing sense on Wall Street that the company's growth prospects are becoming too cheap to pass up.

Now what: According to Deutsche, Apple's risk/reward trade-off is rather attractive at this point. "While growth is expected to decelerate in both [iPhone and iPad] markets, industry growth remains robust, with smartphones expected to grow units in the high teens for the foreseeable future and tablets expected to grow in the mid-20%s," noted Scribner. "We expect iPhones and iPads to be the key growth driver for Apple over the next year, with further upside in iPhones coming from a larger screen sized phone and further penetration in emerging markets." When you couple that upbeat view with Apple's cheapish forward P/E of 11, it's tough to disagree with Deutsche's bullishness.

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Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 10, 2014, at 10:35 AM, AllFundamentals wrote:

    $650 is reasonable but not before multiple new product releases in September.

  • Report this Comment On April 10, 2014, at 10:41 AM, Mathman6577 wrote:

    Apple needs a new product category. China and a bigger screen for iPhone will not be enough.

  • Report this Comment On April 10, 2014, at 11:14 AM, Foolonthepill wrote:

    AAPL had a nice two-day run (it actually went up 50 cents) so it's only predictably logical that it would give it all back today in spades. Motley's daily AAPL puff pieces are doing even less to move the stock than the company's in-way-over-his-head leader, one Timothy Cook. The only way to jolt the stock up is to kick Cook to the curb and bring in an aggressive leader who's obsessed with reinvigorating the brand and not resting on laurels that have loss since been passed by the competition. AAPL should of had a 5" iPhone and smartwatch on the market over a year ago.

  • Report this Comment On April 10, 2014, at 11:49 AM, GaryDMN wrote:

    Don't be surprised to see Apple release a search engine and ad placement technology, based on the Rockstar patent that is the heart of Google's ad placement technology and the Rockstar lawsuit against Google. This should disrupt mobile advertising, in a big way. Will this be Steve Jobs revenge against Google for copying his technology?

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Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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