Wells Fargo raises its Apple target $40 to $205

From Jack Denton’s “Apple Stock Gets a Big Target Price Boost. Supply-Chain Problems Are Improving.” posted Friday on Barron’s:

Wells Fargo raised its price target for Apple (ticker: AAPL) stock to $205 a share from $165 — implying some 25% upside from Thursday’s closing levels.

That makes analyst Aaron Rakers and his team at the bank among the more bullish on Wall Street; the average price target for Apple among analysts surveyed by FactSet is $179.

“We expect a focus on any commentary supportive of a belief that the supply chain is improving, continued confidence in strong end-user demand across the portfolio, as well as services/subscriptions momentum,” said the team of analysts at Wells Fargo…

While supply-chain improvements would be, without a doubt, materially positive, Rakers and his team view the upside in Apple stock as lying somewhere else.

“We believe the investment case for Apple has more to do with the company’s monetization of the installed base through an expanded portfolio of products and services (e.g., augmented reality /virtual reality, auto), rather than the near-term setup,” the Wells Fargo group said.

Maintains Overweight rating. Raises price target to $205 from $165. 

My take: Not the biggest target price boost we’ve seen lately.

See also: Merrill Lynch, now a buy, raises Apple target a whopping $50 to $210

13 Comments

  1. Milenko Tanasijevic said:
    In the positive quadrant:
    ? NFLX, Peloton and and similar exodus into AAPL

    In the negative quadrant:
    ? AAPL services similarly affected.
    Makes it tough holding into earnings.

    0
    January 21, 2022
    • Milenko Tanasijevic said:
      Note NFLX beat on top and bottom line. The services forecast alone sufficient to push it down 25 %

      0
      January 21, 2022
      • Robert Paul Leitao said:
        Milenko and Joe: The market is punishing any equity that disappoints or even hints at slowing growth. Netflix is likely to recover in time. With rising interest rates and inflation running rampant, investors are skittish as opportunity costs rise and fear replaces optimism in the market. We’ve all been through this before. I’ve been through it many times. The question is only whether or not the results and near-term guidance reflect a change in fundamentals. The big challenge for Netflix is reducing the oversharing of accounts worldwide and better monetizing the people who consume content on its platform without a paid subscription. The company has been running pilot efforts at reducing the common practice of subscribers sharing account information with non-family members. Eventually Netflix may not be able to be nice about it anymore.

        1
        January 21, 2022
        • David Emery said:
          “Milenko and Joe: The market is punishing any equity that disappoints or even hints at slowing growth. ”

          Makes me wonder what their ‘continuing growth’ stocks are…

          0
          January 21, 2022
          • Robert Paul Leitao said:
            David: In my reading, energy and financials are being touted.

            0
            January 21, 2022
  2. Robert Paul Leitao said:
    An expanding global customer base and rising ARPU. At least some analysts are moving on from counting iPhones only. Still, putting in the valuation matrix future products and services being offered at some future date and arriving at a valuation outcome of only $210 per share appears to be an effort to justify the price target rather than a price target representing an analytical expression of confidence in Apple’s ability to scale the products and services the company offers today.

    2
    January 21, 2022
  3. “…monetization of the installed base through an expanded portfolio of products and services.” Yup, and that installed base continues to grow like The Blob in the 1950s Steve McQueen movie. Actually FB is more akin to The Blob, sucking up user’s lives in order to grow. Apple’s installed base grows more organically, as people share something and say, “Hey look what my iThing can do for me now!”

    3
    January 21, 2022
  4. Michael Goldfeder said:
    I don’t recall seeing the name of analyst Aaron Rakers and his team at Wells Fargo previously. What this tells me though, is what Gene Munster said back in 2019 that essentially all of the “hardware analysts” who were then covering Apple, would be replaced by an entirely different set of analysts who would look at Apple as a consumer staple. It appears that’s exactly what Wells Fargo has done IMO.

    “We believe the investment case for Apple has more to do with the company’s monetization of the installed base through an expanded portfolio of products and services (e.g., augmented reality /virtual reality, auto), rather than the near-term setup,” the Wells Fargo group said.” That statement alone confirms the thesis Gene Munster predicted three years ago!

    3
    January 21, 2022
    • Charles A. said:
      Aaron Rakers covered AAPL for Stifel for many years.

      1
      January 21, 2022
  5. katherine anderson said:
    Anyone else get to the market today? I got some of my shopping done, just before market close; @ $163.25, first time since last time, 2018 I think it was.

    Hope it’s down more on Monday, I’m not done shopping

    6
    January 21, 2022
    • Lalit Jagtap said:
      Me too. I have kept lots of dry powder. I love majority of sell side analysts as they have helped me in past me to do my AAPL shopping. Hope it will be repeated again next Thursday.

      2
      January 21, 2022

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