After-hours trading in AAPL stock already values the company at $900B, but target prices from almost half the analyst reports seen following yesterday’s bumper earnings report and record-breaking guidance would value the company at more than a trillion dollars …
Business Insider had a roundup of 15 analyst ratings, with seven of them setting a target price for the stock above the magic $193 which would see the company hit a market capitalization of a trillion dollars.
Most rate the stock a buy/overweight, with only Barclays and Deutsche Bank instead rating it a hold. Deutsche Bank gave no particular reason for its position beyond stating that it had a ‘more conservative long-term view.’ Barclays said that big questions have been left unanswered.
In our view, three big questions were not addressed: 1) Why doesn’t Apple disclose a pre-order IPX units number? 2) Are IPX wait times due to really strong demand or bigger-than-usual supply challenges? 3) Will price elasticity be in effect after the early adopters fade in coming quarters?
But most analysts were optimistic, expecting the iPhone X to unlock pent-up demand for a new iPhone design, especially in China. Macquarie summarised most of the reasons given by other analysts.
The bottom line is that Apple is dominating high-end smartphones and associated Services. Our bullish view of X is driven by the fact it is the most innovative iPhone in years, and that the more limited innovation of iPhone 7 still led to 215mm phone sales. Services growth, while still driven by broader app sales, also has more drivers, including Music, iCloud, Search, Apple Pay and more. Finally the new disclosure that Wearables is the size of a Fortune 400 company, and that Apple Watch sales grew over 50% 3 qtrs in row, highlights another category that is adding to overall growth.
Check out the other summaries here.
Photo: Lucy Nicholson/Reuters