Wedbush raises 'resilient' Apple stock price target to $250
Wedbush continues to be impressed by Apple, raising its price target for the iPhone maker from $240 to $250, a second rise in a three-month period.
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In September, analysts at Wedbush upped the firm's price target for Apple from $230 to $240, due to a strong iPhone 15 launch event and supply checks at the time. A few months later, that price target has gone up once more, to $250.
In a note to investors seen by AppleInsider, Wedbush rates Apple as "Outperform," and reiterates the iPhone producer as its "Top Tech Pick for 2024."
"We believe Apple is heading into a strong holiday season over the coming weeks that should translate into iPhone 15 growth that exceeds Street estimates for the December quarter on the heels of strong upgrade activity within the US and China markets that is resilient despite the bear noise," the note starts.
With no sign of "negative revisions" of iPhone unit orders in recent Asian supply chain checks, this reinforces Wedbush's belief there is a "very consistent consumer demand environment around iPhone 15." Unit checks gives Wedbush confidence in its prediction of 220 million to 230 million units for the full year of 2024, which "could show upside if this pace of upgrade activity continues" into the summer quarters.
By contrast, others following Apple on Wall Street fear China sales are not as strong as they could be.
The Street "continues to underestimate the underlying upgrade opportunity in China during the December quarter and FY24," the note continues. The possibility can be lucrative, with "north of 100 million iPhones in China in the window of an upgrade opportunity," and while there are geopolitical and Huawei headwinds, Apple is "seeing a very healthy December quarter" for iPhone 15 in mainland China.
Average selling prices also have a "major tailwind" for this cycle, with it closing in on $925 versus the $825 to $850 ASP of the last few years.
The growth install base of Apple puts the company "in a unique position to monetize this key market region," despite Huawei's domestic China market gains, the note adds. Additionally, it is believed that reports about Apple moving more production out of China to India has "helped successfully tone down the negative undertones from Beijing" seen in September and October.
As Services returns to steady double-digit growth and with iPhone unit sales being high, Wedbush says it believes the "growth demise story" that is being "spun by bears" is something that has floated repeatedly over the last decade, and this is "just another chapter in that book."
The 240 million iPhones in the upgrade window globally, along with a re-acceleration of Services growth has Wedbush claiming "we view this as the golden opportunity to own Apple for the next year."
Wedbush adds that it believes Apple will be the "first $4 trillion market cap by the end of 2024 given the pace of growth and monetization we estimate for Cupertino over the next year." Services alone would be valued between $1.5 trillion and $1.6 trillion on a "sum-of-the-parts" standalone basis.
"In a nutshell, Apple is in a Rock of Gibraltar-like strong position heading into 2024 with the stage set for a renaissance of growth in Cupertino," the note concludes.
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