The Survey Results Moving Apple's Shares Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Apple were up 1% at 12:00 p.m. EDT on Monday, outperforming the broad market, as broker Cowen raised its price target to $135 from $115 in a report published this morning.

So what: Cowen raised its price target on the basis of a survey it commissioned with 3,000 adult respondents: 1,000 smartphone owners in both the U.S. and China and 500 in both the U.K. and Japan. In analyzing the results, Cowen came to three conclusions:

1. "Virgin" demand is an important driver of unit sales growth:

2. Despite current limitations in the specs (limited battery life, principally), underlying demand for the Apple Watch is strong:

3. Finally, there appears to be genuine momentum behind Apple's venture into electronic payments, Apple Pay:

Now what: I'm not going to provide the numerical rationale behind Cowen's higher price target upgrade, which looks a bit like reverse engineering a number in order to catch up with the current stock price (actually, I take offense to the whole notion of a "price target" for a stock, but that's another discussion.) However, I think the thrust of the survey results is that Apple appears likely to continue taking share from its nearest rival and is putting together an ecosystem that is increasingly "sticky." The latter is a very powerful trend because it lowers the obsolescence/ fashion risk that traditionally haunts technology and consumer electronics companies.

At 14.6 times estimated earnings-per-share for fiscal 2015, Apple's shares look well anchored within their fair value range, neither a screaming buy, nor a wildly overvalued, but, rather, poised to deliver acceptable returns over the next 3-5 years.

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Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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