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As Apple approaches a valuation of $ 2 trillion $, analysts continue to ratchet their price targets ahead.
Wedbush analyst Dan Ives, who shares one of the more aggressive bulls on Apple (AAPL) shares, on Monday reiterated his Outperform rating and raised his price target to $ 515, the highest on the Street, of $ 475. Deutsche Bank analyst Jeriel Ong reiterated a Buy rating while raising his target to $ 480, from $ 440.
On Monday, the stock was up 1.2% at $ 449.80, giving Apple a market capitalization of about $ 1.9 trillion.
In a research note, Ives focuses on the outlook for iPhone 12, which is now likely to launch in October. “Our new controls in the Asia supply chain … show a noticeable uptick in forecasts for iPhone 12, which bodes well for demand trends following this launch of supercycle in October,” he writes.
He previously expected four iPhone 12 models to be unveiled, with a mix of 4G and 5G models, but his checks for liver keys now indicate that only 5G phones will hit the market this fall. The next-generation 4G phones could be available early next year, at lower prices, he says.
Ives says that Apple is likely to offer both American and non-American versions of the next-generation iPhones. The US version will include millimeter wave technology – a faster but shorter range version of 5G.
The Wedbush analyst claims that Apple has a “once-in-a-decade opportunity in the next 12 to 18 months,” with the potential upgrade of 350 million of the estimated 950 million iPhones currently in use. The iPhone 12 is the most important product cycle for the company since the iPhone 6 was launched in 2014, he says.
“We still believe that many on the street underestimated the massive overhaul of demand around this supercycle for Apple, which remains the opportunity for the bulls because the $ 2 trillion dollar threshold on the market is now within reach. with a lot more fuel left in Cupertino’s tank in 202, “he writes.
Ives raised its “bull case” target on the stock market to $ 600. At that level, the company would be worth more than $ 2.5 trillion. He writes that Apple is his favorite 5G game, and that he looks forward to “a further reappraisal of Apple’s share”.
Meanwhile, in its own note on Monday, Deutsche Bank’s Ong offers six reasons why the recent expansion of Apple’s rating makes multiple sense.
- The valuation of the S&P 500 has increased from about 17 times previous revenue in 2015-2019 to 23-24 times recently. “This has provided a tailwind to Apple,” he writes.
- Reduced risk of material unit loss, with iPhone revenue stable, and iPad and Mac growing slowly.
- Apple has increasingly integrated the various parts of its ecosystem.
- Apple’s revenue mix has shifted to higher-margin services and software.
- Wearables are growing, powered by Apple Watch and AirPods.
- The strategy for buying shares is “increasingly valued.”
Ong says its new price target is based on a 2021 calendar price / earnings multiple of 28 times, slightly above the big cap technology companies. “We see a slightly above average rating vs. peers as honest when we compare Apple’s overall growth potential and representativeness to the peer group’s growth expectations,” he writes. “With stable gross and operating margins and a solid balance sheet, we have see the potential reward from stock performance as positively skewed compared to the risk profile of the company. ”
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