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"How exactly did Brian White come up with that number?\u00A0\n\n  \nWhen last we heard from Ticonderoga&amp;#8217;s Brian White, a few hours after Apple \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tAAPL\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t reported its Q1 2012 earnings, he was reiterating the 12-month price target he had set the previous July:\u00A0&amp;#8220;Apple crushes even the most optimistic expectations,&amp;#8221; he wrote. &amp;#8220;$666 here we come.&amp;#8221;\nTwo days later, Ticonderoga closed up shop.\nOn Monday White resurfaced at a new firm, Topeka Capital, with a new Street-high price target guaranteed to draw attention to itself: $1,001.\n&amp;#8220;Apple fever is spreading like a wildfire around the world,&amp;#8221; he wrote in Monday&amp;#8217;s note to clients, his enthusiasm for the company undiminished, &amp;#8220;and we see no end\u00A0in sight.&amp;#8221;\nWhat&amp;#8217;s odd about White&amp;#8217;s new price target &amp;#8212; which is at least $201 higher than the most bullish of his colleagues &amp;#8212; is that the model supporting it is actually rather modest.\nWe know of four professional analysts who have called for higher Q2 revenues than White&amp;#8217;s $37.02 billion, nine with higher EPS numbers than his $10.06, and 15 with higher iPhone unit sales estimates than his 29.64 million. The only number that sticks out in White&amp;#8217;s spreadsheet is his estimate of 14.47 million iPads, which is higher even than all but two of the most bullish independent analysts.\nSo how did he get to $1001? By factoring in Apple&amp;#8217;s cash holdings, anticipating continued breakneck growth and using a P/E ratio from 2006-2010:\nOur 12-month price target of $1,001.00 for Buy-rated Apple is\u00A0based on just over 17x our interest expense/income adjusted CY13 pro forma EPS estimate\u00A0plus net cash per share of $103.66. This equates to a straight P/E of just over 19x our CY13\u00A0EPS estimate and is below the mid-20 multiple of 2006-2010. In our view, Apple&amp;#8217;s valuation\u00A0does not reflect the growth the Company has been able to deliver in recent years, nor future\u00A0growth prospects. Between FY04-FY11, Apple grew sales by 44% per annum and increased\u00A0EPS by 86% per year. Trading at a P/E (ex-cash) of just under 10x our CY13, we believe the\u00A0stock still has significant upside potential.\nInvestors must have liked the sound of that. Apple&amp;#8217;s shares closed at $618.63, up $19.08 (3.18%) for the day."^^<http://www.w3.org/2001/XMLSchema#string>
<http://fortune.com/2012/04/02/behind-the-new-street-high-apple-price-target-1001/?section=money_technology>