Will Apple SURGE to $750?

Apple’s (NASDAQ:AAPL) recent stock surge has resulted in Needham & Co. increasing its price target on the company to $750. Needham analyst Charlie Wolf, who only revises his price target for the company semi-annually, said the revision was in response to upward movements for all of Apple’s business divisions. Because of the frequency of his revisions, Wolf’s 12-month price target prior to Wednesday was $620, way below Apple’s record price of $665 earlier this week.

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Giving each of Apple’s business segments a dollar value per share, Wolf estimates that the iPhone accounts for $323.20, or 43.1 percent, of the share price. The smartphone’s dollar-per-share value went up by $60.08 in Wolf’s calculations. The iPad’s value grew $22.02 to $109.94 to contribute 14.7 percent to the forecasted total, while the Mac platform went up by $14.04 to $100.50, making up 13.4 percent of the target price.

“iPhone sales have far exceeded the projections in our model despite softer sales in advance of the launch of the next generation model, the analyst wrote. “iPad sales have likewise continued to grow faster than the rate forecast in our valuation model, thanks to the device’s dramatic invasion of the business and education markets.”

However, the analyst added that Apple was still a relatively small player in the global smartphone and personal computer market and had room to grow. He predicts the iPhone to account for 22 percent of smartphone sales this year.

“The unique feature of our model is that the growth in Mac sales is driven solely by the halo effects emanating from the iPhone and iPad,” Wolf wrote in his note to clients. “Changes in our forecast of iPhone and iPad sales, then, also impact Mac sales as well as software and peripheral sales.”

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