AAPL now 'strong buy,' will climb back to $225 in 2019, says Needham

Posted:
in AAPL Investors edited March 21
Apple's ecosystem is an attractive proposition for investors, Needham analysts claim as the firm upgraded the iPhone maker's stock from a "buy" to a "strong buy" rating, advising it anticipates good results for Apple's Services, Apple Watch, AirPods, and other areas in the future.




Ahead of an event that is expected to launch both the Apple News subscription and video streaming offering on March 25, Apple is being considered an extremely valuable company by Needham. Analysts for the firm have raised its price target for the company from $180 to $225, at the same time as upgrading the rating, with the new target representing a 20-percent increase of the $188.16 per share price hit at Wednesday's market closure.

The potential for Apple's growth stems from its Services and other non-iPhone areas, the firm told investors on Thursday. "We anticipate better than previously expected results from both Services and Wearables, Home and Accessories, as well as valuation upside created by falling churn and strong barriers to entry" for competitors, wrote analyst Laura Martin.

Needham suggests the video streaming project, which is thought will offer iOS device users access to original programming, will "drive higher lifetime value" for 900 million users. It is thought the service would provide the access to Apple-created content for free, at least at first, with third-party services being offered under a subscription.

The shift from reliance on iPhone revenue towards other sources, such as Services, has been speculated by Needham and others, as Apple tries to find ways to keep profit growth positive. "Our 1Q19 proprietary survey tells us that, whether or not Wall Street believes AAPL is an ecosystem company, its users do," advised Martin.

The focus on Services and other elements has been picked up by other analysts. J.P. Morgan has speculated Apple should use its cash hoard to make considerable investments in gaming and video streaming to make its Services business grow even more, while Morgan Stanley believes Monday's launches could take Apple back to a $1 trillion valuation.

The shift away from iPhone reliance was also brought up by Loup Ventures' Gene Munster in May 2018, suggesting at the time the concept of "Apple as a Service."
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Comments

  • Reply 1 of 23
    MacProMacPro Posts: 18,166member
    Yay!  I'm not counting my chickens and for me, as I bought a long, long time ago, anything over 170 and I am in heaven but I'd love to see AAPL eventually valued at its true worth.
    edited March 21
  • Reply 2 of 23
    slurpyslurpy Posts: 5,118member
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    lkruppchabigridyrat
  • Reply 3 of 23
    lkrupplkrupp Posts: 6,954member
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    edited March 21
  • Reply 4 of 23
    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
  • Reply 5 of 23
    SpamSandwichSpamSandwich Posts: 31,005member
    Huge stock jump this morning.
  • Reply 6 of 23
    FolioFolio Posts: 540member
    Citi today upped target too, to $220 from 170, I believe.
  • Reply 7 of 23
    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
    “Mediocre”?  Sounds like that means there are competitors who are better than mediocre?  Care to enlighten us as to who the better-than-average competitors are?
    nealc5
  • Reply 8 of 23
    nealc5nealc5 Posts: 13member
    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
    How does anyone know Apple's product roadmap? Apple famously keeps their mouth shut and doesn't give anyone their product roadmap, so you can't say its mediocre because you don't know what's coming.  They have expressed interest in the healthcare space, and that's a HUGE potential market. This is a long term strategy.
    SpamSandwichridyrat
  • Reply 9 of 23
    lkrupplkrupp Posts: 6,954member
    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
    “Mediocre”?  Sounds like that means there are competitors who are better than mediocre?  Care to enlighten us as to who the better-than-average competitors are?
    Don't be waiting for an answer. They never answer because they can’t. 
  • Reply 10 of 23
    bluefire1bluefire1 Posts: 886member
    Apple is a buy, but in my opinion, it won’t be a strong buy until next year when significant  changes to the iPhone will be forthcoming and growth in its new video services will be more fully realized.
    edited March 21
  • Reply 11 of 23
    darkpawdarkpaw Posts: 129member
    I think Apple is back as the world's most valuable company again. AAPL = 918.8bn, MSFT = 910.9bn, AMZN = 888bn.
    SpamSandwichapplesnoranges
  • Reply 12 of 23
    SpamSandwichSpamSandwich Posts: 31,005member
    nealc5 said:
    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
    How does anyone know Apple's product roadmap? Apple famously keeps their mouth shut and doesn't give anyone their product roadmap, so you can't say its mediocre because you don't know what's coming.  They have expressed interest in the healthcare space, and that's a HUGE potential market. This is a long term strategy.
    Love the potential for massive disruption in both healthcare and preventative care with combination of devices and artificial intelligence and I’m sure Apple will be a big player in that disruption.
  • Reply 13 of 23
    flydogflydog Posts: 259member
    In the span of 6 months it went from strong buy (hit $232 a share) to stay away from this turd (down to $142) and back to strong buy (currently at $193).



  • Reply 14 of 23
    flydogflydog Posts: 259member

    bluefire1 said:
    Apple is a buy, but in my opinion, it won’t be a strong buy until next year when significant  changes to the iPhone will be forthcoming and growth in its new video services will be more fully realized.

    As if the "analysts" weren't bad enough, now we have anonymous internet people chiming in with their forecasts. 

    That aside, what you just wrote could be said about any company on any given year, just swap out "iPhone" and "video" with the applicable products.
    edited March 21
  • Reply 15 of 23
    flydogflydog Posts: 259member

    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
    How do you know that there isn't a visionary (or several) working at Apple already?  Do you really think Tim Cook is designing iPhones, Macs, and AirPods in his spare time?


  • Reply 16 of 23
    flydogflydog Posts: 259member

    MacPro said:
    Yay!  I'm not counting my chickens and for me, as I bought a long, long time ago, anything over 170 and I am in heaven but I'd love to see AAPL eventually valued at its true worth.

    It is valued at its true worth.  The trailing PE for the stock has remained fairly constant over the past 10 years, which means the company is growing at the approximately the same rate as investors predicted.  If the trailing PE had been constantly dropping over time then you would be correct.  A growing PE would mean the opposite, that the stock is being overvalued.

    The flaw in your analysis is that like many people you focus only not he PE (low is undervalued, high is overvalued), yet neither is necessarily correct and usually isn't correct.
    edited March 21
  • Reply 17 of 23
    echosonicechosonic Posts: 452member
    bluefire1 said:
    Apple is a buy, but in my opinion, it won’t be a strong buy until next year when significant  changes to the iPhone will be forthcoming and growth in its new video services will be more fully realized.
    Thats why its a "strong buy" right now.  Because by then, you will have missed out on the investment....by the time the video is realized, the stock will already have climbed and you won't have the earning opportunity you have now, when its still only 195.
    SpamSandwichapplesnoranges
  • Reply 18 of 23
    echosonicechosonic Posts: 452member

    flydog said:

    MacPro said:
    Yay!  I'm not counting my chickens and for me, as I bought a long, long time ago, anything over 170 and I am in heaven but I'd love to see AAPL eventually valued at its true worth.

    It is valued at its true worth.  The trailing PE for the stock has remained fairly constant over the past 10 years, which means the company is growing at the approximately the same rate as investors predicted.  If the trailing PE had been constantly dropping over time then you would be correct.  A growing PE would mean the opposite, that the stock is being overvalued.

    The flaw in your analysis is that like many people you focus only not he PE (low is undervalued, high is overvalued), yet neither is necessarily correct and usually isn't correct.
    so what is a perfect PE?  15?  50?  If all things are equal, what PE is the perfect representation/correlation to a company's value?

    Because as I see it, the PE is just another metric that some people put value in and others don't.
    SpamSandwich
  • Reply 19 of 23
    tipootipoo Posts: 1,037member
    I think Apple stock is still relatively cheap, but who else thinks analyst price targets are complete bollocks barely worth mentioning? 
  • Reply 20 of 23
    slurpyslurpy Posts: 5,118member
    lkrupp said:
    slurpy said:
    But wait, all the analysts said that Apple was fucking finished when the stock took a dive, and there were headlines every 5 seconds explaining to us that the stock drop is the result of Apple's numerous inherent failures of a company and their uncertain, but probably doomed, future. Of course, not that it's been clawing it's way back up (as any fucking rational person could have predicted with near 100% certainty) it's suddenly a "BUY BUY BUY" again. So reactive, every single time.
    Amen, brother slurpy. Such is life on Wall Street. Like the Phoenix rising from the ashes AAPL is again within striking distance of both Microsoft and the $1 Trillion market cap. The “Apple is doomed” narrative has achieved mythical status and is now ensconced in the annals of financial analyst bullshit. And OH! Fire Tim Cook™
    Keep Tim Cook. Bring a better/new product visionary for better products. As an investor, the supply chain is golden. As a consumer, the product roadmap is mediocre.
    Uh, what the fuck do you know about their product roadmap? You don't have a clue, neither does anyone outside Apple's inner circle. And if Apple products are considered "mediocre", I'd LOVE to know what you consider an existing example of something "good", "great", or "excellent". Provide some links to these non-Apple incredible, innovative products of excellence. 
    edited March 21
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