Canaccord Genuity hikes its Apple target $80 to $355

Analyst T. Michael Walkley joins the green wave with a 29% bump.

From a note to clients Tuesday that landed on my desktop today:

We believe Apple’s ecosystem approach, including an installed base that exceeds 1.4B devices globally, is leading to record services revenue, and we expect the higher- margin services revenue growth to continue outpacing total company growth.

We are also encouraged by the strong demand for the iPhone 11 lineup and believe Apple will maintain its market share leadership of premium-tier smartphones that could be bolstered by a 5G upgrade cycle.

Further, Apple has market share leading positions in wearables with Watch and AirPods, and both have strong sales and growth momentum. Following strong 2H/F’19 results and ongoing strong cash flows resulting in $98B in net cash, we anticipate management will likely continue to bolster share repurchases and increase dividends.

Maintains Buy rating and raises price target to $355 from $275.

My take: Biggest leap yet, largely through higher multiples (20x 2021 EPS from 16x).

3 Comments

  1. Jerry Doyle said:
    My, my, my…. What is there above in Michael Walkley’s statement of findings NOT to like! He also gives a “buy” rating, while blessing shareholders with continued share repurchases and dividend increases.

    “Laissez le bon temps rouler!”

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    January 15, 2020
  2. Gregg Thurman said:
    What is there above in Michael Walkley’s statement of findings NOT to like!

    <bNOTHING

    It’s become abundantly clear that WS has a bias against hardware, and a clear preference for recurring revenue.

    Clearly the metric to watch in Apple’s future earnings reports is Services. A valuation of $2 Trillion is only the start.

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    January 15, 2020
  3. Gregg Thurman said:
    Walkley’s revenue estimate at $94.362 Billion (posted NOV 28, 2018) is the high estimate of 233 estimates so far on estimize.com

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    January 15, 2020

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