Bloomberg News

Priceline.com May Beat Apple to $1,000 Stock: Chart of the Day

March 23, 2012

Priceline.com Inc. (PCLN) is closer to $1,000 a share than Apple Inc. (AAPL), and comments by Piper Jaffray Cos. analysts indicate the online travel agency will break that barrier sooner.

The CHART OF THE DAY shows closing prices for both stocks since Jan. 15, 2010. That’s when Gene Munster, a Piper analyst who follows Apple, discussed the possibility of a $1,000 price during an interview with the Business Insider website.

Priceline.com’s prospects for getting there were outlined yesterday by Michael Olson, one of Munster’s colleagues at the Minneapolis-based firm. The stock has “a realistic path” to reach that level by mid-2014, he wrote in a report.

Earnings per share are poised to increase 21 percent annually on an adjusted basis for 2011 through 2015, he wrote. At that pace, the Norwalk, Connecticut-based company will have an annual profit of $50 a share when the period ends. A $1,000 price equals 20 times the eventual earnings.

“This is not a stretch in our view,” Olson wrote, as Priceline.com will be the main beneficiary of a shift toward booking travel online. His 12-month estimate for the stock is $763, the third-highest of 19 analysts in a Bloomberg survey.

Priceline.com exceeded $700 a share on March 21, four days after Apple first traded for more than $600. The stocks closed yesterday at $711.99 and $599.34, respectively.

Munster didn’t disagree with Henry Blodget, Business Insider’s chief executive officer and editor-in-chief, in 2010 when asked whether Apple will rise to $1,000 in five years. The analyst never actually predicted that the maker of iPhones and iPads, based in Cupertino, California, will reach that price. His projection for the next 12 months is $718.

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus