After a seven-month run that took Apple shares to an all-time high in late September, the company’s stock Jumped to more than 25% and touched new lows as 2012 drew to an end. According to Topeka Capital Markets analyst Brian White, Apple’s strong portfolio, a reversal of the negative news trend surrounding the company, and a fresh new “iPhone 5S” will help the stock rebound in 2013, and he maintains a Buy rating on Apple shares with a sky-high price target of $1,111.
“Apple is our top overall pick for 2013,” White wrote in a note to investors on Wednesday that discussed Topeka’s stock picks moving into the new year. “With the 25% correction in Apple’s stock from the high in September, the stock is now trading at just 7.7x our CY13 EPS estimate (less cash) and the company’s portfolio has never been stronger, in our view.”
He continued, "We believe there is still plenty to look forward to at Apple, including the potential for greater choices (i.e., colors, sizes) around the next iPhone in 2013, combined with accelerating momentum with the iPad mini and continued strength with the iPad franchise at large.”
In a separate note, White said that according to his checks with Apple’s suppliers, the next-generation iPhone will represent a huge departure from earlier models.
“Our checks indicate that the next iPhone will have more choices for customers,” the analyst wrote. “This entails an expansion in both the color patterns and screen sizes with the next iPhone (i.e., likely the iPhone 5S) that we currently believe will be launched in May/June with certain supply production starting in March/April.”
White believes the next iPhone will be available in five different colors: pink, yellow, blue, white & silver and black & slate. He also believes there will be two different screen sizes available on the device, marking the first time Apple has released one phone with multiple display size options.
He continued, noting that multiple screen sizes could allow Apple to better address emerging markets with a lower-cost iPhone.