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Apple shares have hit a record as optimism rises for the fall launch of 5G iPhones and evidence grows that the App Store is achieving better sales than expected this quarter.
In afternoon trading, Apple shares (ticker: AAPL) were up 2.5% to $330.52, after trading as high as $331.12. The stock appeared on track for a record close above the previous high of $326.32, recorded on Feb. 12.
Apple is up close to 12% for the year, and has rallied 46% since bottoming at $223.76 at the close on March 23. The company has a market capitalization of $1.432 trillion, ahead of Microsoft(MSFT) at $1.415 trillion. At a price of $346, the company’s market cap would reach $1.5 trillion, while it would hit $2 trillion if the stock rose to $462.
Wedbush analyst Dan Ives repeated his Outperform rating on the stock, while lifting his price target to $375, from $350. He increased his “bull case” target to $425, from $400.
“Despite the trifecta of headwinds around a global Covid-19 pandemic, soft macro backdrop, and a supply chain continuing to normalize in Asia, [CEO Tim] Cook & Co. have weathered this Category 5 storm in a Jacques Cousteau-like fashion,” Ives wrote in a research note, referring to the French ocean explorer.
Ives said the company’s services business has outperformed regardless of the lockdowns and is on pace to top $60 billion in revenue for the September 2021 fiscal year. “AirPod sales have remained relatively robust,” and should approach 85 million units this year, versus 65 million last year, he said.
The Wedbush analyst said Apple’s first virtual Worldwide Developers Conference, scheduled for June 22, should bring “a glimpse of iOS 14, with a number of mobile enhancements around virtual reality and other software updates over the coming year.”
This year’s conference, he said, “will be a drumroll ahead of a major hardware release schedule ahead across the Cupertino product portfolio with iPhone 12 [which may or may not be the designation for the 5G iPhones due later this year] the main event and growth catalyst for the Street.”
Ives repeated his view that the company can be the first company with a market cap of $2 trillion, driven by 5G iPhones and services. He thinks the services business alone is worth $500 billion to $650 billion.
CFRA analyst Angelo Zino also repeated a Buy rating on Apple shares, lifting his target to $360, from $320.
“The recent downturn has demonstrated how profitable Apple can remain in even challenging economic conditions,” Zino wrote. “We think Apple’s 5G iPhone launch will be of important consideration to investors, which we estimate will still be delayed by 4 to 6 weeks, but should help support an improvement in replacement cycles. We think wearables growth is likely to exceed expectations this holiday selling season, on Apple Watch/AirPods.”
Credit Suisse analyst Matthew Cabral noted that App Store revenue is tracking toward 35% growth in the quarter, including 39% growth in May, the same point that Morgan Stanley analyst Katy Huberty made in a note several days ago.
“Despite a slow start, increased screen time amid widespread ‘stay at home’ measures is now translating into a rapid acceleration in App Store revenue,” Cabral wrote. “We’re encouraged by building App Store momentum, both as evidence of Apple’s ability to increasingly monetize its nearly 1 billion iPhone user base and in support of multiple expansion for the stock as the mix shifts to higher-quality, more recurring revenue.”
Cabral remained Neutral on the stock given the potential for a recession to hurt iPhone sales, but raised his target price to $295, from $260.
https://www.barrons.com/articles/ap...valuation-approaches-1-5-trillion-51591384269
In afternoon trading, Apple shares (ticker: AAPL) were up 2.5% to $330.52, after trading as high as $331.12. The stock appeared on track for a record close above the previous high of $326.32, recorded on Feb. 12.
Apple is up close to 12% for the year, and has rallied 46% since bottoming at $223.76 at the close on March 23. The company has a market capitalization of $1.432 trillion, ahead of Microsoft(MSFT) at $1.415 trillion. At a price of $346, the company’s market cap would reach $1.5 trillion, while it would hit $2 trillion if the stock rose to $462.
Wedbush analyst Dan Ives repeated his Outperform rating on the stock, while lifting his price target to $375, from $350. He increased his “bull case” target to $425, from $400.
“Despite the trifecta of headwinds around a global Covid-19 pandemic, soft macro backdrop, and a supply chain continuing to normalize in Asia, [CEO Tim] Cook & Co. have weathered this Category 5 storm in a Jacques Cousteau-like fashion,” Ives wrote in a research note, referring to the French ocean explorer.
Ives said the company’s services business has outperformed regardless of the lockdowns and is on pace to top $60 billion in revenue for the September 2021 fiscal year. “AirPod sales have remained relatively robust,” and should approach 85 million units this year, versus 65 million last year, he said.
The Wedbush analyst said Apple’s first virtual Worldwide Developers Conference, scheduled for June 22, should bring “a glimpse of iOS 14, with a number of mobile enhancements around virtual reality and other software updates over the coming year.”
This year’s conference, he said, “will be a drumroll ahead of a major hardware release schedule ahead across the Cupertino product portfolio with iPhone 12 [which may or may not be the designation for the 5G iPhones due later this year] the main event and growth catalyst for the Street.”
Ives repeated his view that the company can be the first company with a market cap of $2 trillion, driven by 5G iPhones and services. He thinks the services business alone is worth $500 billion to $650 billion.
CFRA analyst Angelo Zino also repeated a Buy rating on Apple shares, lifting his target to $360, from $320.
“The recent downturn has demonstrated how profitable Apple can remain in even challenging economic conditions,” Zino wrote. “We think Apple’s 5G iPhone launch will be of important consideration to investors, which we estimate will still be delayed by 4 to 6 weeks, but should help support an improvement in replacement cycles. We think wearables growth is likely to exceed expectations this holiday selling season, on Apple Watch/AirPods.”
Credit Suisse analyst Matthew Cabral noted that App Store revenue is tracking toward 35% growth in the quarter, including 39% growth in May, the same point that Morgan Stanley analyst Katy Huberty made in a note several days ago.
“Despite a slow start, increased screen time amid widespread ‘stay at home’ measures is now translating into a rapid acceleration in App Store revenue,” Cabral wrote. “We’re encouraged by building App Store momentum, both as evidence of Apple’s ability to increasingly monetize its nearly 1 billion iPhone user base and in support of multiple expansion for the stock as the mix shifts to higher-quality, more recurring revenue.”
Cabral remained Neutral on the stock given the potential for a recession to hurt iPhone sales, but raised his target price to $295, from $260.
https://www.barrons.com/articles/ap...valuation-approaches-1-5-trillion-51591384269
