Credit Suisse raises Apple target $35 to (still wet) $295

From a note to clients by analyst Matthew Cabral that landed on my desktop Thursday:

We’re encouraged by building App Store momentum, both as evidence of Apple’s ability to increasingly monetize its nearly 1bn iPhone user base and in support of multiple expansion for the stock as the mix shifts to higher-quality, more recurring revenue. We balance our enthusiasm, however, with a more cautious view on iPhone (~50% of revenue) ahead as we continue to expect pressure on large discretionary consumer purchases against a weak macro backdrop, even with an upcoming 5G launch (in C4Q, per CSe).

With the stock essentially back to all-time highs (+10% ytd vs. S&P -4%) and now trading at a peak multiple (21x CY21 Street EPS vs. trailing 5-yr 14x) despite lingering headwinds to Product demand, we remain Neutral and await a better entry point.

Maintains Neutral rating, raises price target to $295 from $260. 

My take: $260 was betty entry point.

4 Comments

  1. David Emery said:
    It’s really hard to reconcile “balance our enthusiasm” with a target that is already 10% under water! This is yet another ANALyst who has neither the courage of his convictions nor a track record of success. WHY do these people still have jobs, given they work in a business where measuring things and projecting from those measurements is the way they work?

    3
    June 5, 2020
  2. Fred Stein said:
    We need a Rip Van Winkle award for these analysts who just recently discover Apple’s services business.

    His low PT suggests that he does not believe in the future of the services business.

    1
    June 5, 2020
  3. Jerry Doyle said:
    “… we remain Neutral and await a better entry point.”

    Brother Matthew Cabral believes there is another train stop where he can climb above the Apple Express!

    1
    June 5, 2020
    • Aaron Belich said:
      Or thinks he can drive FUD to force a price drop. I think Apple has already bought and retired those shares. I do not believe $AAPL will ever see sub-$200/share again unless there is a fundamental change in the management of the company.

      1
      June 5, 2020

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