“I’m raising my price target on Apple," Cramer said, saying his $200 price target on the company no longer applies if a new accounting change goes into affect.
Following strong lobbying on behalf of Apple, the Financial Services Accounting Board is considering applying a change in its rules, a change which would enable Apple to recognise revenue from its iPhone and Apple TV products during the quarter in which they are sold.
At present, Apple is required to recognise the money it raises on these products over a 24-month period.
Cramer said if Apple is allowed to recognize all of its true earnings in the quarter, its earnings per share will rocket from $9 to $12. With this in mind he set a new price target for the company – $264 a share.
The stock-picker also urged investors to move fast, explaining that many bigger money managers haven’t yet considered the implications of the accountancy rule change, creating opportunity for smaller investors.
He expects the new rules to come into effect in the next few weeks.