Evercore raises Apple price target $15 to $360

Analyst Amit Daryanani sees a path that could take Apple's market cap to $2 trillion by 2024.

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

ALL YOU NEED TO KNOW: A constant question we get on AAPL is – “Hasn’t the stock gone up too fast, where can it go from here?”. In this DETAILED report we analyze the upside potential for AAPL and think fundamentally they are positioned to become the first two trillion dollar market company (stock gets to $550) over the next 4-years (implying mid-teens stock appreciation annually!). Key levers to get to $2 Trillion market cap scenario are:

    1. FY24 EPS Gets To $23: this implies EPS growth of 14% over next several years driven by combination of operational tailwinds and buyback support.
    2. Services & Wearables Uplift: We expect wearables and services to sustain double digit growth driven by uptick in ARPU and better monetization of the install base.
    3. Gross-margins: We see mix coupled with scale enabling a path towards consistent gross-margin expansion. Services segment operates in the mid 60% GM vs. corporate average in high 30’s. Also, in our upside scenario we think product GMs return to FY18 levels.
    4. Multiple Expansion: Upside assumes multiple rerates to ~24x FTM EPS still a healthy discount to the 26-27x average P/E for consumer staple/luxury goods peers).

Net/net: Apple continues to offer the best risk/reward in large-cap tech and long-term investors should use any weakness to add to positions. Maintain Outperform rating but adjusting our target to $360 while our “Upside” target moves to $550 (implying $2 Trillion market cap).We think next 12-months AAPL enjoys a combination of EPS growth + multiple expansion.

Maintains Outperform rating, raises price target to $360 from $345. 

apple evercore 2 trillion

Click to enlarge.

My take: Daryanani's enthusiasm for Apple remains uncurbed.


  1. Jerry Doyle said:
    It was refreshing to read the highlights of Amit Daryanani’s note to his Apple clients. I believe his note is a little conservative in its 4 year estimate of $550, as I would say $600. Daryanani nevertheless is in my opinion on solid ground in his charting of Apple’s upside potential over the next four years.

    It also is invigorating seeing how many analysts gradually are working their way toward that $400 price target of mine. One would think that Daniel Ives of Wedbush Securities would be leading the charge since he came out well before the others with a $400 price target before collapsing it later after COVID-19.

    May 31, 2020
  2. Fred Stein said:
    Amit’s “Net/net” is perfect. Warren Buffett said the same recently.

    In bitter irony, the tragic events in our streets today, may create buying opportunities for Apple investors, while hurting poorer people the most.

    May 31, 2020
  3. Bruce Oran said:
    I agree with all the comments on the potential growth of Apple. My main concern is that as this company approaches a $2 trillion market cap, they will be in the crosshairs (if not already) of every regulatory agency in the United States government, Europe and beyond. Especially with a change in government in November, Apple becomes a very enticing target. The true test will be if Apple can maintain its rate of growth and at the same time reassure the powers that be
    that they can be a benevolent force in the United States. In other words they have to make it more painful for the government to break them up then to keep them whole. In addition, on August 24, 2021 Tim Cook will have been the chief executive officer for 10 years. Judging by how well his diplomatic efforts with this difficult administration, not to mention China, have been received, it would not shock me if he left Apple to run for office. Should that happen, who could take his place? I think that would be a real concern as an Apple shareholder.

    May 31, 2020
  4. Gregg Thurman said:
    I’m going to ignore references to today’s strife (no matter where they occur) because they are both a constant (at any given time there is strife somewhere) and fleeting (strife comes and goes in surprisingly short cycles).

    A Company, like Apple, that thinks, plans and executes long term will enter and come out of periods of strife ever stronger.

    The above makes Daryanani’s comments all the more prescient, excepting his $550 scenario within 5 years. From $320 to $550 in 5 years represents a compound annual 12% growth rate. That’s a really nice growth rate but it understates AAPL’s long term average growth rate in excess of 20%.

    Apple achieved this not by selling more computers, but by creating superior products for underserved categories and new product categories, all of which had to add value to Apple’s fully integrated ecosystem master plan.

    That being the case I see two dynamics growing Apple/AAPL forever, growth/leverage of existing products and the creation of new products/product categories.

    Daryanani (nobody does) doesn’t address the later point of product category creation, and which explains their tepid future growth rates.

    Since Jobs return in 1997 Apple has been all about new product/new product categories (where the puck is going to be). Why would we expect a 33 year history to suddenly stop.

    My personal 5 year target would be closer to $750, especially if SE pricing foreshadows a new Apple pricing strategy.

    May 31, 2020
  5. David Emery said:
    What’s the calculation for capitalization as impacted by share buy-backs? A reduction in shares available (with no other change) would reduce market capitalization, right? And a reduction in shares available (again with no other change) should also produce more EPS, right? But there’s no guarantee these two balance out mathematically? The expectation would be ‘fewer shares, more revenue to go around, and that -should- help the price per share go up.’

    May 31, 2020
    • Gregg Thurman said:
      David, no matter the buy back, AAPL’s growth is tied to future REVENUE and NET INCOME growth. Buybacks have no impact on either, solely impacting EPS. This is why so many view buybacks as a management trick to inflate the equity.

      The key to discerning whether a firm’s buyback is an accounting slight of hand is easy: is the buyback a one time or short term act, and has the company been suffering from lackluster revenues and earnings.

      In Apple’s buybacks none of those conditions exist, ergo its buybacks are being used to prop an equity’s value but rather bolster its value.

      There is no formula that I’m aware of that can be used to calculate future benefit simply because there are so many unknowns: how many shares (percent) will be bought back, duration of buy backs, the extent of revenue and net income growth, and impact of competition and product life expectancy, among others.

      I look at buybacks as an unquantifiable side benefit to ownership. If I were a long term holder of an Quito I’d be focusing on the Company’s fundamentals without buyback expectations.

      June 1, 2020
  6. Miguel Ancira said:
    My $600 medium term price target is not looking so crazy. Again, nobody is taking into account the future of health care as it relates to Apple, because there is so little information. But, I have a feeling the end of 2020 will bring a little more clarity.

    June 1, 2020

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