Wedbush raises Apple price target to $350, says Apple is past the 'eye of the storm'
Investment bank Wedbush is raising its Apple price target to $350 on what it describes as a robust performance by the company's services, plus prospects of recovering demand and the highly anticipated "iPhone 12."
Wedbush is forecasting that the worst of the COVID-19 economic impact is in the past for Apple.
In a note to investors seen by AppleInsider, lead Wedbush analyst Daniel Ives maintained that there are "darker days" ahead for the economy, but adds that clients should use near-term uncertainty as an "opportunity to buy the stock for the other side of the dark valley."
The analyst notes that investors have come away from Apple's last earnings call focused on the company's "Teflon-like" services sector, despite early concerns of nightmare results and the lack of June quarter guidance. Ives says that the company's services business has been "robust" despite COVID-19, and estimates that it'll hit more than $60 billion of revenue in 2021.
Wedbush also believes that the reopening of Apple's retail footprint and a normalizing supply chain are two signs that the company is starting to lay the groundwork for post-pandemic recovery.
The expected "iPhone 12" lineup later in 2020 should start that recovery, Ives added. Wedbush estimates that roughly 350 million out of Apple's 925 million iPhone user base are in an "upgrade window," which could bode well for the next cycle.
Ives doesn't expect this year's 5G iPhones to debut in the fall, however. Instead, the analyst said Wedbush's current base case assumes that the "iPhone 12" lineup will launch in the November or early December timeframe ahead of the busy holiday season.
The analyst is maintaining Apple's outperform rating, but has bumped its 12-month price target for Apple from $335 to $350, stating that the "eye of the storm is in the rear view mirror" for Apple's supply and demand.
That $350 price target is based on a 9.2x multiple for Services and a 4.3x multiple for Apple's mature hardware and iPhone sector. Wedbush's price-to-earnings multiple is 24.9x for the 2020 fiscal year.
Ives last changed his Apple price target to $335 in March following a broader economic plunge due to coronavirus. That lowered prediction followed two months of investor notes forecasting a $400 price target.
Shares of Apple are currently trading at $317.46 on the NASDAQ, up 0.78% in trading.
Wedbush is forecasting that the worst of the COVID-19 economic impact is in the past for Apple.
In a note to investors seen by AppleInsider, lead Wedbush analyst Daniel Ives maintained that there are "darker days" ahead for the economy, but adds that clients should use near-term uncertainty as an "opportunity to buy the stock for the other side of the dark valley."
The analyst notes that investors have come away from Apple's last earnings call focused on the company's "Teflon-like" services sector, despite early concerns of nightmare results and the lack of June quarter guidance. Ives says that the company's services business has been "robust" despite COVID-19, and estimates that it'll hit more than $60 billion of revenue in 2021.
Wedbush also believes that the reopening of Apple's retail footprint and a normalizing supply chain are two signs that the company is starting to lay the groundwork for post-pandemic recovery.
The expected "iPhone 12" lineup later in 2020 should start that recovery, Ives added. Wedbush estimates that roughly 350 million out of Apple's 925 million iPhone user base are in an "upgrade window," which could bode well for the next cycle.
Ives doesn't expect this year's 5G iPhones to debut in the fall, however. Instead, the analyst said Wedbush's current base case assumes that the "iPhone 12" lineup will launch in the November or early December timeframe ahead of the busy holiday season.
The analyst is maintaining Apple's outperform rating, but has bumped its 12-month price target for Apple from $335 to $350, stating that the "eye of the storm is in the rear view mirror" for Apple's supply and demand.
That $350 price target is based on a 9.2x multiple for Services and a 4.3x multiple for Apple's mature hardware and iPhone sector. Wedbush's price-to-earnings multiple is 24.9x for the 2020 fiscal year.
Ives last changed his Apple price target to $335 in March following a broader economic plunge due to coronavirus. That lowered prediction followed two months of investor notes forecasting a $400 price target.
Shares of Apple are currently trading at $317.46 on the NASDAQ, up 0.78% in trading.
Comments
In my own case I’m due for a routine endoscopic exam. I called my gastroenterologist’s office to ask if they were doing procedures now. Yes, but I have to get tested for Covid-19 first and then spend 72 hours in self-isolation before coming in. I told them I would call back.
We are just beginning to see the utter destruction of the economy take hold, Huzzah, we’ll be safe from the virus but we’ll be living in poverty, dependent on the government for our meager existence.
Analysts: "I predict Apple will do better in the next few months."
So you'd have been happier if we plowed ahead full steam and hit the high ends of the mortality projections? A few million dead would be fine, because the economy? Fuck right off.
A huge amount of deaths are from nursing homes. Close them off, quarantine them and isolate them completely, leave everything else open.
That method would have been far more effective than sending infected patients straight back into nursing homes, so that they could infect everybody else there. Good job politicians and governors in certain states, lol. And those are the people who we should be listening to? No thanks.
About a quarter of the total deaths in the US are from nursing homes. Not sure why you'd point that out as if that were a meaningful metric, when a ton more people are being hospitalized or dying that have never set foot in nursing homes. We're still at the beginning of this thing, and it's about to get worse again now that people think they can go out and brunch and shit again as if nothing is happening. Have fun sticking your head in the sand — a lot of people are still yet to die from this.
It's not the end of the world, even though the media is doing its best to make it seem like that, and I for one am certainly not going to go around acting like it is.
You mentioned nursing homes accounting for a quarter of US deaths, but stats vary greatly from state to state and in quite a few states, they account for around half of all deaths.
I realize that. What's your point?
Since you're clearly an expert, how would you do things differently?
Sure, what's a few hundred thousand more dead bodies. Would your opinion change if your mother was among them?
I never said that nothing should be done to mitigate the spread of the virus and I am for example in favor of Apple stores checking temperatures of customers entering, so that any infected people will be refused entry.
The country has also been taking many measures over the past many months, but the time has come to loosen up on those measures as there is a balance game between taking extreme measures and completely shutting down society and the economy.
It's time for the economy to start to get back on track. A few more dead here and there is going to happen anyway.
And my point about the nursing homes is that they should have been closed off from the very beginning, that's just plain common sense. Sending the infected back into those homes is basically murder for many people. It was known from the beginning that the elderly and the sick were those most at risk, so this was obvious the entire time, and yet the governors in certain states still chose to do what they did.
Yes, some mothers will die, maybe mine, maybe yours. It is what it is.
"More than one million people around the world have been deemed recovered from the coronavirus, but beating the initial sickness may be just the first of many battles for those who have survived.
Some recovered patients report breathlessness, fatigue and body pain months after first becoming infected. Small-scale studies conducted in Hong Kong and Wuhan, China show that survivors grapple with poorer functioning in their lungs, heart and liver. And that may be the tip of the iceberg.
The coronavirus is now known to attack many parts of the body beyond the respiratory system, causing damage from the eyeballs to the toes, the gut to the kidneys. Patients’ immune systems can go into overdrive to fight off the infection, compounding the damage done."
https://metro.co.uk/2020/05/12/new-york-now-has-100-children-suffering-deadly-covid-19-related-kawasaki-disease-12693774/
"Governor Cuomo said: ‘We have about 100 cases of an inflammatory disease in young children that seems to be created by the Covid virus. this is something that’s just starting…the symptoms of the children are analyzed to the Kawasaki disease or toxic shock syndrome. ‘It’s an inflammation of the blood vessels and can affect the heart..if we have this issue in New York we probably have it in other states. These children don’t present the usual Covid symptoms, they’re not respiratory symptoms.’ The governor did not share any further details about the three children killed by the condition. Kawasaki disease is usually very treatable, and can be managed with medications as common as aspirin. The illness is rare, with just 20,000 cases recorded annually in the US."
Not so rare anymore, but so sorry for your inconvenience. /s