Piper Jaffray: Apple’s services are more valuable than its products

Analyst Michael Olson explains why he raised his Apple price target to $201 from $187.

From a note to clients that landed on my desktop Wednesday:

Our sum-of-the- parts (SOTP) analysis provides additional “ammo” for why Apple is working to shift the narrative towards services. The SOTP analysis suggests that, using comp group average multiples, Apple’s services segment is actually more valuable than the product segment. Those two segments, products & services, go hand-in-hand, so a sum-of-the-parts exercise may not be entirely relevant, but we believe it provides further evidence that AAPL shares have upside to current levels and, potentially, well into the $200s.

Cue the spreadsheet:

piper jaffray services products

 

Maintains Overweight rating and (Monday’s) $201 price target. 

My take: Why not a nice even price target, like $200? Or, for that matter, $216?

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