No way, says analyst Daniel Ives, that 2020’s good news is already baked into Apple’s share price,
From a note to clients that landed on my desktop Monday:
Many investors are asking us: Is all the good news baked into shares after an 80%+ historic upward move over the last year?
The answer from our vantage point is a resounding NO, as we view only the first part of this massive upgrade opportunity leading to a transformational 5G “super cycle” with 200 million to 220 million iPhone units now the new line in sand for demand based on our recent Asia supply chain checks.
Coupling this dynamic with a metamorphosis-like valuation re-rating by the Street around the company’s $50 billion+ annual services revenue stream is the 1-2 punch to how we ultimately see a stock in the $350 to a new bull case $400 valuation by year-end.
Maintains Outperform rating and, for now, his Street-high $350 price target.
My take: Ives has stayed in front of the Apple pack throughout the 2019 bull run. It’s a strategy others have used in the past. It works to get you on CNBC until it doesn’t.
Currently, AAPL is at $299.29, UP $1.86 from Friday’s Close, having rejected the day’s intraday low of $292.75.
“…the market has shaken off fears of a US/Iran war.”
I’m not seeing that. I see GOOGL and AMZN and other tech stocks getting some continuation of momentum from previous days, and AAPL getting some benefit from that. But I see a pretty nervous market as a whole.
There’s not much doubt that this unilateral Trump Administration action has created long term reverberations. What those reverberations will lead to is not yet known.
I should add that, just as gold has gone up over this, value stocks like AAPL may be seen as safer havens as well. That Apple is being seen these days as both a value and a growth company is a real positive for AAPL. IMHO.
“…the market has shaken off fears of a US/Iran war.”
I’m not seeing that.
On Thursday AAPL hit another all-time high of $300.60. On the Soleimani assassination news Friday, AAPL immediately declined >$2.00 from its intraday high of $300.67, Closing at $297.43. Then in after-market and this morning’s pre-market trading, AAPL declined further, with AAPL Opening today at $293.79, then (with all the media buzzing over Soleimani’s assassination and the possibility of war) declined further to an intraday low $292.75. That’s an overnight decline of $4.68 at the end of an unprecedented string of 26 new all-time highs in 45 trading days.
Almost immediately after bottoming this morning AAPL started going up until it peaked at $299.96, just 64¢ off its all-time high. Was the sell-off just coincidental to the killing of Soleimani, was it caused by it, or was it profit-taking? My guess is that it was another in a long string of knee jerk reactions of weak-kneed investors to the Soleimani news.
But then what caused AAPL to come to within pennies of its all-time high today? Could it be that smarter investors, after looking at the string of Iranian sponsored attacks on its neighbors (costing an American death and others to be wounded) decided the killing of Soleimani was an appropriate response, and that Iran wouldn’t, in fear of another “disproportionate” US response do anything, took advantage of the sell-off, shrugging off the dip?
By definition that would be “…the market has shaken off fears of a US/Iran war.”
Needham’s Laura Martin is another analyst I trust.
Could $350 be the new normal?