Apple has a new Street-high price target: $360

Evercore’s Amit Daryanani, peering ahead to fiscal 2021, anticipates a trifecta of growth factors: services, wearables and 5G iPhones.

From a note to clients that landed on my desktop Friday evening:

All You Need to Know: Revenue growth should continue to accelerate in FY21 as Apple likely benefits from tailwinds across multiple business lines. Specifically,

1) iPhone revenue should grow on a y/y basis for the first time since FY18 driven by pent-up demand for a 5G iPhone (expected end of FY20).
2) Low relative penetration of AirPods & Watch should support around 30% revenue growth in the wearables business.
3) New services continue to gain traction driving a services growth rate around 20%.

Our FY21 estimates are 3-5% above consensus, primarily driven by the top line as we see revenue coming in at $305B vs. consensus at $295B.

Net/net: Despite the sustained impressive performance of AAPL stock, we think the stock continues to work higher from these levels as AAPL benefits from the trifecta of – better services growth, wearables acceleration and iPhone 5G cycle tailwinds.

Click to enlarge. 

Maintains Outperform  rating, raises price target to $360 from $315.

My take: Daryanani gets to $360 using a multiple of 23 times earning. Six months ago, when his price target was $205 on a multiple of 17, he wrote a prescient note that asked “Can Services Drive Multiple Expansion?”


  1. Dan Scropos said:
    Interesting fact—Carl Icahn’s selling of Apple at $105 has currently cost him $11 billion. At $360, that numbers grows to $14 billion.

    January 11, 2020
    • Ken Cheng said:
      Yes, but to be fair, what did Carl buy instead?

      January 12, 2020
  2. Jerry Doyle said:
    “Can Services Drive Multiple Expansion?” That’s what’s happening.

    WS analysts community are recognizing finally that Apple is coming together as this maturing, fully developed, synergistic hardware, software and services business enterprise model predicated on a still growing installed base of over 1.4 billion active devices and over 1B active users. It’s sinking indelibly into the mindset of analysts that Apple has multiple business lines feeding off of that 1B device in everyone’s pockets ya’ll, from Apple Pay, to the App Store, News Services, Apple TV+, Apple Arcade, Cloud subscription, Apple Music, all networking with other Apple device products such as Air Pods and Watch. That is a 360 cirque of a network band full of revenue growth driving upward a higher P/E well deserved ratio.

    The iPhone 5G cycle could have multi-year cycle tailwind of possibly 2-3 years. No way 5G is going to appear overnight. The average phone now is being held four years.

    There are solid rational reasons to be “bullish” on Apple with a near horizon of Gregg Thurman’s noted investor sentiment of $330, street price target of $360 and even a bullish target of $400 this time next year.

    Laissez le bon temps rouler! Geaux  Geaux 

    Lastly, please indulge me as it all culminates Monday night in the “Big Easy;” Geaux LSU Tigers!

    January 11, 2020
  3. Turley Muller said:
    Every analyst cites 5G as driver behind their price target increases predicting it will accelerate upgrades. 5G is a nonevent due to the lack of any noticeable difference in user experience. Still years away until 5G does anything for you. I expect sales will be strong based on other new features- such as rear 3D camera and AR functionality if those rumors hold.

    January 11, 2020
    • Gregg Thurman said:
      I agree that the benefits of 5G remain elusive in the near term (two years.), but with that king of bandwidth available there’s no telling what new must have features, either from Apple or 3rd party developers will appear. Who foresaw the explosion in mobile apps and the revenue that generated?

      My bull case scenario is based on consumer sentiment that they need 5G (thank you Samsung and T-Mobile for hyping it) and continued high growth rates in Wearables and Services.

      January 11, 2020
      • Turley Muller said:
        Gregg- agreed. It’s a multi-step, multi-year process. Current networks are 5G antennas on LTE core & equipment. Things get cool in a couple years when carriers migrate to Standalone 5G core Which is a virtualized, software defined network in the clouds. It’s virtualized so a network can be split into multiple instances each with specific functions- ie optimized for latency or for speed. Or capacity. Etc. (Network slicing).

        I think the marketing and hype will at least trick a few people. And it depends how many users who would have upgraded this year hold off until next year. If iPhone is a little soft this year then that is the likely culprit.

        January 11, 2020
  4. Gregg Thurman said:
    I give kudos to the authors of targets at $325 and above. It’s not easy to breakaway from group think.

    With the wall broken through I expect others to follow. I expect consensus among this vanguard to rise substantially over the next 9 months. $400 may be today’s “best case” scenario, but by this time next year I feel it will be consensus. .

    Post JAN Earnings should be very interesting.

    January 11, 2020

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