Deutsche Bank raises Apple price target to $280

Analyst Jeriel Org admits he was wrong about Apple in 2019, adds that he had plenty of company.

From TheStreet Insider, which quotes the text of a note sent to clients Sunday:

As we look at AAPL's outlook in 2020, we provide our thoughts on 3 key topics:

1) What should investors think about AAPL's valuation expansion?
2) What are some fundamental reasons for the recent move?
3) What's stopping us from being more constructive?

Ultimately, we believe that AAPL's fundamental results are likely to come in stronger than present Street modeled expectations, driven by strong holiday sales across AAPL's product lines. However, the significant intra-quarter stock price move is unlikely to be matched by the improved fundamentals, and we expect AAPL to normalize at a higher valuation. In our view, such a setup bodes poorly for investors who consider what to do with their AAPL holdings from present levels, as the stock is unlikely to come close to repeating last year's returns.

While we freely admit our more neutral view on the stock has been wrong (though, find us an investor who made a bullish call with such an abrupt valuation expansion as the primary thesis lever), we also believe that our view that AAPL has significantly less levers from current levels for 2020 upside has merit.

Ultimately, we believe that the recent, sharp valuation expansion creates a setup where risks (fundamentals do not keep pace with stock appreciation) remain balanced with the potential reward (all that is expected fundamentally comes true, and more it seems!)

Changes rating to Buy from Hold, raises price target to (still wet) $280 from $230. 

My take: Weak. His job is to anticipate valuation expansions, not to blame them.

3 Comments

  1. David Emery said:
    When I saw this, I thought of an obscene old Army saying that relates to nursing from the rear…

    So despite all the reasons he’s wrong, he’s still almost $20 Under Water.

    2
    January 6, 2020
  2. Fred Stein said:
    “freely admit” and then make excuses?

    His old target of $230 was too low. No excuse.

    0
    January 6, 2020
  3. David Emery said:
    “(though, find us an investor who made a bullish call with such an abrupt valuation expansion as the primary thesis lever)”

    Warren Buffett, maybe??? 🙂

    0
    January 6, 2020

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