A new report from analyst firm Piper Jaffray says that despite Apple's "lagged" stock gains this year, now is a good time to own shares, based on the company's future.
"There are several reasons why some are concerned [Apple] will not move higher, including ownership reaching maximum levels among key investors, tough growth comps over the next several quarters, and lack of share appreciation following a significant beat in March," Piper Senior Research Analyst Gene Munster wrote in a note to investors this morning.
"But we believe that the multiple will expand slightly as [Wall Street] gains confidence in sustainable revenue growth of 25 percent or greater," Munster wrote, adding that "new product categories, and new software announced at [Apple's Worldwide Developers Conference on June 6] will each serve as a catalyst in the future."
The firm expects Apple's overall revenue to grow by 28 percent over each of the next four years, with products like the iPhone and iPad exceeding that at 30 and 40 percent respectively. Munster says the stock maintains its Overweight rating and $554 12-month price target.
Munster reiterated once again that one of the aforementioned new product categories could be TV sets, which could arrive in the next two to four years and include tie-ins to the App Store. This is based on Apple's recent additions of MLB and NBA apps to its Apple TV set-top box, and the fact that flat-panel TV shipments have been on the rise. Such a product could add 3 percent to Apple's revenue in 2012, the report estimates, rising to 5 percent in 2013 and 7 percent in 2014. … Read more