shares are trending higher as more analysts weigh in positively about the company.
Two analysts joined the parade of those lifting their price targets for the stock—trading just a few points below Tuesday’s record closing high—and a third said a look at Apple’s patents offers hints about a range of new products.
Wedbush analyst Dan Ives repeated his Outperform rating on Apple shares (ticker: AAPL), while lifting his target for the stock price to $425, the highest on the Street, from $375. He also established a “bull case” target of $500.
At that level, Apple’s market capitalization would pass $2 trillion. (He isn’t the first analyst to see a route to a $500 stock price.)
“We believe during 2021 Apple has strong potential to be the first $2 trillion valuation given the 5G tailwinds and services momentum potential over the coming years,” Ives wrote in a research note. “In particular, we are seeing a continued demand snapback in China despite some speed bumps and the stage is setting for a massive pent up iPhone 12 cycle heading into the Fall in this key region as well as globally.”
Ives said his checks with suppliers to Apple in Asia suggest calendar 2020 iPhone shipments in the 160 million to 180 million range. Momentum is strong heading into 2021 with the launch this fall of 5G iPhones, he said.
The Wedbush analyst thinks the Apple services business is worth $600 billion to $650 billion. A valuation in that range would make that slice of the Apple empire alone worth nearly as much as
Meanwhile, Barclays analyst Tim Long, who has an Equal Weight rating on Apple shares, lifted his target price to $326 from $288—an increase that leaves his call below the stock’s current level. Shares were up 0.4%, to $361.37 on Thursday.
Long wrote in a research note that checks in Asia indicate strong demand for the low-end iPhone SE2, with recovering demand for iPhone 11. He also says there is more evidence that Apple is acting aggressively to control materials costs on the phones in order to maintain margins while adding features.
He remains cautious on the stock, saying “questions persist about the deterioration of iPhone upgrade demand with rising competition in [the] premium smartphone segment.”
BofA Global Research analyst Wamsi Mohan, who has a Buy rating and $390 price target on the stock, did a deep dive into Apple’s patent portfolio in a research note Thursday, seeking hints on future products. He reported clues about new moves in wearables, health and fitness, and augmented and virtual reality.
“The patents around wearables suggest to us that Apple could be targeting Apple Watch with more health monitoring including blood pressure, swappable bands and casings, a ring as a gesture recognition/input device, AR glasses and VR headsets, increased integration with a car on navigation with AR, safety and comfort customizable settings and more,” Mohan wrote.
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