Wedbush raises Apple target $50 to Street-high $425

From a note to clients by analyst Daniel Ives that landed on my desktop Wednesday evening:

We believe during 2021 Apple has strong potential to be the first $2 trillion valuation given the 5G tailwinds and services momentum potential over the coming years. In particular, we are seeing a continued demand snapback in China despite some speed bumps and the stage is setting for a massive pent up iPhone 12 cycle heading into the Fall in this key region as well as globally.

China remains a key ingredient in Apple’s recipe for success as we estimate roughly 20% of iPhone upgrades will be coming from this region over the coming year. Our recent Asia checks and supply chain contacts are now looking at iPhone units in the 160 million to 180 million range for CY20 with strong underlying momentum into CY21 on the heels of iPhone 12 which remains the linchpin to our “5G super cycle thesis” on Apple.

The services business we assign a $600 billion to $650 billion valuation range given the increasingly importance of this key revenue stream that is getting a new appreciation by investors during this COVID-19 pandemic, as Cook & Co. continue to stress the software/hardware ecosystem during WWDC this week virtually with developers front and center.

Maintains Outperform rating, raises price target to $425 from $375, establishes new “bull case target” of $500.

My take: Knowing Ives, it was only a matter of time.

See also: Apple at $366.53: Look who’s underwater now

3 Comments

  1. Steven Philips said:
    Your take was my first thought.

    0
    June 24, 2020
  2. Fred Stein said:
    Not crazy.

    Apple has already won the wrist, ear, and Tablet markets. They’ve marginalized Android device and App markets. With A-series chips, Apple continues it’s growth at the expense of Windows PCs – slow, almost imperceptible. Just as the lowly PC now owns the data center, cloud, A-series chips can take some of that some day.

    No other chip architecture can deliver competitive ROI.

    Apple has decades of growth in health, finance, video and games.

    3
    June 24, 2020
  3. Jerry Doyle said:
    Reading this blog post pleases me immensely.

    I always believed that Daniel Ives’ had a prescient understanding of Apple’s forward stock price momentum, and believed devoutly his target price earlier this year of $400. Even after the March debacle, I still believed a target price of $400 was on the table for Apple to pick-up in a year. So, when PED afforded us the opportunity to submit our one year price target I went with $400, but that price already was taken so I went with $403 by end of Q2, March 30, 2021. I never once doubted that target price, not even during the lows of COVID-19.

    I also believe fully Daniel Ives’ “bull case target” price of $500. I see that target price by end of Apple’s Q1 2022 (12/31/2021), or when Tim C and Luca M report earnings at the end of January 2022. Yes, Apple has the potential to be a $500 stock by end of January 2022!

    1
    June 24, 2020

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