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Cramer Ups Price Target on Apple

Shares of Apple will not reach just $300 a share, Cramer said Tuesday, but $325.

Apple is not only the top technology company and best manufacturer on earth, Cramer said, it's also the best retailer. With its Mac computers and iPhone, iPad and iPod product lines, it's selling into the music, phone, communications, server, laptop, desktop, television, gaming, social networking and fashion businesses. All that combined, Cramer said, means the company is doing "much better than anyone is expecting."

While on Wall Street the consensus earnings estimate for Apple's fiscal 2011 is $17.50, Cramer is looking for $22 a share. With the average stock on the Standard & Poor's 500 Index is trading at 14.8 times earnings, that means Apple should reach $325. How so? Just multiply the earnings by the multiple to get the price. Remember, P = E x M.

"Don't be scared off by the triple-digit stock price," said Cramer. "Think of it as a fabulous $26.80 stock that's going to $32.50, or do whatever other mental gymnastics are necessary, as long as you buy the greatest retailer on earth."

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