Apple (Nasdaq: AAPL) hasn't been much of a darling this quarter. The stock has closed lower in three of the past four weeks, and the perennial market beater has shed 5.7% of its value this quarter -- and a sobering 12.2% since hitting a recent all-time high.

Despite the likelihood that Apple is the bellwether dragging the market in general and tech stocks in particular lower this quarter, I wouldn't be a contrarian if I admitted to being bullish on Apple. Most people are.

A whopping 45 of the 53 major analysts covering the company have it rated as a Buy or Strong Buy. An equally impressive 92% of the 27,929 of your fellow Fools have tagged the company with an Outperform in Motley Fool CAPS. Nearly everybody's sold on Apple's long-term potential.

They're just afraid of buying in now.

A bullish note lost in the wilderness
Even Apple's blowout quarterly report -- enough to give the company its only winning week this quarter -- hasn't been enough to restore the near-term faith of investors.

Lost in all of the selling was Topeka Capital Markets analyst Brian White. He turned heads a month ago by setting a price target of $1,001. In retrospect, the move seems poorly timed. His call came just around the time the stock was peaking. However, rightfully impressed by Apple's fiscal second-quarter showing, White bumped his 12-month price target to $1,111 two weeks ago.

Apple's all-time high of $644 and targets of $700 or higher seem so far away right now. The debate at the moment is whether Apple will hit $500 on the way down before it revisits $600 on the way up.

There are legitimate reasons for concern.

  • Microsoft's (Nasdaq: MSFT) generating buzz for the upcoming Windows 8 operating system, and it's not Vista-flavored. The new platform will work well with touchscreens, giving the world's largest software giant its first legitimate shot at relevance in tablets. Windows 8 should lead the way in the new wave of portables, where monitors detach from keyboards to double as tablets.
  • Wireless carriers in this country are getting fed up with the huge subsidies they have to shell out to Apple on iPhones and the data-hogging culture of its users who are grandfathered into unlimited data plans. Verizon's (NYSE: VZ) CFO recently voiced his support for Windows Phone as a necessary third ecosystem.
  • AT&T's (NYSE: T) CEO made some interesting comments at a conference a few days ago, including an admission that he regretted ever offering unlimited data to iPhone buyers. He also fears that Apple's iMessage -- a free Web-based messaging service -- is eating into the company's texting revenue. And he naturally fears Microsoft's own Skype, but his comments are adding fuel to the fire of the love-hate relationship between his company and Apple.
  • Sprint Nextel's (NYSE: S) share price has been declining and its deficits mounting since the country's third largest carrier began offering the iPhone.

This partner resentment is important to note, because the iPhone has become Apple's workhorse, accounting for 58% of its revenue this past quarter.

The one thing the bears are forgetting
When was the last time that Apple's stock was this cheap?

It's easy to pull up a stock chart, arrive at the conclusion that Apple is trading far closer to its 52-week high than to its 52-week low, and suggest that the stock isn't cheap at all. After all, Apple's stock began the year at $405, and it's trading nearly 40% higher, despite the pounding the shares have been taking in recent weeks.

However, Wall Street has also been scrambling to revise its bottom-line targets higher. In December, analysts were eyeing a profit of $34.77 a share for fiscal 2012, and that estimate has climbed 35% to $46.87 a share. Fiscal 2013's per-share forecast has surged 38% from $38.96 to $53.93. The stock itself has inched just marginally higher than analyst estimates, but we're also now nearly two quarters closer. In other words, on a trailing and forward-looking basis, Apple really is cheaper.

White's seemingly outlandish target of $1,111 is a crisp 21 times next year's earnings, but isn't that still a discount to Apple's growth rate? A year from now we'll also be more than more than halfway through with fiscal 2013. If we look further out to the $60.53 profit per share that the pros are targeting for fiscal 2014 and the $80.59 pegged for fiscal 2015 -- even though those targets, too, will probably continue to inch higher --seeing Apple at $1,111 represents forward earnings multiples of 18 and 14, respectively.

If that sounds fair, keep in mind that we're nowhere close to $1,111. Apple's stock would have to nearly double to hit those perfectly reasonable targets.

As long as Microsoft doesn't crash Apple's party, we might get there sooner than you think.

Apple jacks
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