UBS hikes Apple price target to $250 from $215

A big hike, as snagged by CNBC:

UBS raised its price target on Apple shares to $250 from $215 citing the company’s “recurring hardware revenue stream” from its iPhones. Analysts at the bank also said revenue for Apple’s services segment could grow 20 percent on a year-over-year basis for the next two years.

Maintains Buy, raises price target to $250 from $215.

My take: Timothy Arcuri, long underwater, has come up for air. Tune in tomorrow at 10 a.m. Pacific (1 p.m. Eastern) for the big reveals.

5 Comments

  1. Robert Paul Leitao said:
    Note to Mr. Arcuri: Apple has had recurring hardware revenue streams from the time the company went public. There was that period in the mid-90’s, but never mind…

    If Apple does not surpass the record set in FY2015 for iPhone unit sales in the waning weeks of FY2018, the company will definitely set new unit sales records in FY2019 with ASPs (average selling prices) also at record levels.

    What concerns me about the referenced note is that Apple’s hardware revenue streams and Services revenue streams are not disconnected. Services revenue is likely to rise by at least 20% over the next two years because Apple is bring innovation to market. The more innovation that Apple delivers in its iPhone handsets, necessitating the higher prices, the faster Services revenue is apt to rise.

    Now that price target revisions by Street analysts to the $250 range are becoming commonplace, I’m looking for notes from analysts and price target revisions that do more than play catch-up. A deep dive into Apple’s Services revenue growth phenomenon will indicate the more advanced the hardware Apple brings to market, the greater the likelihood Services consumption will rise at a pace greater than the rise in hardware unit sales.

    In my view, price targets revisions to the $275 range are now justified due to Apple’s rising revenue and rising net income combined with ongoing reductions in the fully diluted share count.

    5
    September 12, 2018
    • Gregg Thurman said:
      In my view, price targets revisions to the $275 range are now justified due to Apple’s rising revenue and rising net income combined with ongoing reductions in the fully diluted share count.

      Absolutely. Multiple Stars to you Robert.

      2
      September 12, 2018
  2. Martin Beutling said:
    The 245-250$-area sounds promising….but it’s merely a 10%-increase on yesterdays closing-price of 223$.

    Not very bold.

    I wonder when the first analyst (even the one who shall not be named…long story) is coming out with targets around or above 300$.

    According to yesterdays story about Daniel Tellos (absolute amazing) analysis, this cannot be much longer.

    Edit: there is one thing I often discuss with fellow investors here in Germany:
    EVERYONE is focussing on iPhone sales
    A FEW are focussing on buy-backs, but
    NOBODY thinks of what will happen to the service-revenue when Apple is, finally, integrating a Netflix-like offer to Apple Music (or whatever it will be called then).

    VERY promising

    4
    September 12, 2018
    • Gregg Thurman said:
      You heard it here first.

      February 1, 2019

      0
      September 12, 2018
  3. Gregg Thurman said:
    With Arcuri’s latest I now have 9 of what I believe are January price targets. Welcome as it is, Arcuri’s upgrade falls short of consensus by $1.00 and comes after 8 others led the way.

    For the past six or seven years AAPL has been going up, on average, 26% per year. Without doing a lot of spreadsheet work I think it’s safe to say that next September AAPL will trade at $290.

    0
    September 12, 2018

Leave a Reply