Will Apple Stock Rise $80 Past Its High ... or $140?

Apple Stock OUtlook iPad iPhone
Apple Stock OUtlook iPad iPhone

Apple (AAPL) shares are trading near their all-time high of $422.86, but most analysts expect them to go much higher. Forty-six analysts tracked by Thomson/First Call have a median price target of $500 -- an approximately 20% rise -- and the most optimistic among them forecasts the stock will hit $666 -- about 60% higher than it trades now.

The primary reason for these aggressive estimate is that analysts who follow Apple have a consensus EPS forecast of $27.53 for 2011, and $32.39 for 2012, compared to $15.15 last year.

These rosy scenarios depend in large measure on the iPhone, a new version of which is set to be released in the coming months. Wedbush Securities expects 21 million iPhones will be sold in the current quarter, up from its previous estimate of 20 million. And next quarter, when the iPhone 5 will be available the entire period, the firm predicts 26 million iPhones will ship, up from its earlier forecast of 23 million. On the tablet computer front, Wedbush forecasts Apple will ship 8.8 million iPads this current quarter, up from a prior estimate of 6 million.

Those Wedbush estimates seem extraordinarily high, but forecasts from firms such as Ticonderoga Securities, RBC Capital, and J.P. Morgan (JPM) are as high or higher.

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There appears to be very little risk that iPad sales will be dragged down by competition. Among the many companies that have released tablets of their own -- Samsung, Hewlett-Packard (HPQ), and Research In Motion (RIMM), among others -- none has made much of a dent in Apple's market share, and some hopeful iPad-killers have been outright failures.

One challenge Apple may not be able to entirely overcome is the rise in Google (GOOG) Android-based smartphones. A host of manufacturers have adopted the Android OS, and its market share is tabulated by research firms as being higher than the Apple OS. Of course, Android runs on dozens of smartphones while Apple's runs on only the iPhone.

Nor is Android -- as an OS -- the greatest hurdle iPhone sales will face. The real issue may come down to hardware. Many competing smartphones are equipped to run on 4G and ultra-fast LTE networks. Sprint-Nextel (S), AT&T (T), and Verizon Wireless are each promoting their own versions of ultra-fast wireless broadband -- and they are promoting their high-speed networks more widely than any single handset. Given that the power of a smartphone is heavily dependent on the speed at which it can access its network, Apple cannot afford to be too late to the 4G party. But Apple has no 4G-capable iPhone on the horizon, at least as far as anyone outside the company can tell.

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