Apple Computer Inc. stock hit a four-year high on Monday following the release of a report from Piper Jaffray analyst Gene Munster. Munster said he expects Apple’s stock price to hit $100 thanks to the iPod’s expected “halo effect” on Mac sales.
Munster raised both his price target for Apple stock and his earnings estimates for the company for its fiscal years 2005 and 2006 following research showing 13 percent of PC-using iPod owners either had bought a Mac or are planning to buy a Mac within 12 months. Piper Jaffray’s research bolsters a long-held belief by Apple executives that the iTunes Music Store and iPod’s popularity among Windows PC users would eventually lead them to purchase a Macintosh.
Munster conservatively halved those prospective sales from 13 percent of PC-toting iPod users to to 6.5 percent. Munster contends that such sales would raise Apple’s earnings to US$1.52 per share for fiscal 2005, up from $1.29, and $2.17 cents per share for fiscal 2006, up from $1.50.
Munster’s report caused Apple stock to surge in early trading on Monday. The stock went as high as $64 before lunch. It had fallen back to $61 at 12:13 PM Eastern Time, still tracking 10.57 percent higher than its Friday close.