Apple shares could rally 50% on new iPhone Upgrade Program

“The iPhone upgrade announcement makes things interesting for investors, especially as iPhone sales accounted for 56% of Apple’s revenue last year,” Alexander Eule reports for Barron’s.

“Apple’s shares finished the week up 4.5%, to $114.21, although the stock is still down 14% from its summer peak, making a cheap stock even more compelling,” Eule reports. “If the leasing program proves to be popular, Apple could soar 50% in the coming year.”

“At its current price, Apple trades for 11.8 times earnings projections for the next 12 months. Back out the company’s $150 billion in net cash, and the forward multiple drops to just 9.1,” Eule reports. “The leasing program attacks the primary bear case on Apple—slowing iPhone growth. Amit Daryanani, an analyst with RBC Capital Markets, estimates that the upgrade cycle for iPhones has stretched to 26 months from 22 months in 2013. After getting a jump-start from the larger iPhone 6 this year, analysts expect iPhone sales to flatline at 235 million units in 2016. The iPhone Upgrade Program, Apple’s official name, has the potential to reverse the trend, and more. ‘You essentially create a certain group of your user base that is going to be on a 12-month upgrade cycle,’ Daryanani says. The big question is how large that group becomes.”

Read more in the full article here.

MacDailyNews Take: That’d be nice, wouldn’t it, AAPL shareholders?

[Thanks to MacDailyNews Reader “Bill” for the heads up.]


  1. I like it when them websites do the blog coverage of the Apple event presentations and as part of the blog they keep a-postin’ Apple’s stock price… like it’s gonna start shootin’ up the moment Tim or one of the other fellers introduces some newfangled whatsis.
    Instead… it goes down! And all the nerds payin’ such earnest attention sit there a-scratchin’ their heads tryin’ to fathom how
    could this be?

    1. It sounds crazy for investors to be disappointed at such a figure, but they must be since Apple’s share price barely moves. To me, that’s a huge number but to those Apple investors it must seem like a pittance. Why does a $50 tablet excite Amazon investors but a $1000 iPad Pro is seen as a disaster to Apple investors. That’s a huge profit difference. Still and all, I don’t see any major Apple share price gains on the horizon. Apple stock is plagued with mediocrity.

      1. macnificentseven48 wrote:
        Monday, September 14, 2015 – 3:48 pm

        “Still and all, I don’t see any major Apple share price gains on the horizon. Apple stock is plagued with mediocrity.”

        I invested money in Apple stock in a self-directed stock IRA in the early to mid ’90s, supplemented by another purchase just after 9/11. My adjusted cost basis is $0.78 a share. With Apple now at ~$115 (147x gain) I don’t see that as mediocrity. I have four other IRAs, which are in managed mutual funds, insurance annuity highly compensated executive pay plans, etc. None of them have made me one tenth the returns the Apple stock has.

        I’ve recently been taking some gains, then re-investing the money back in Apple on down trends.

        There isn’t a single big-cap or medium-cap stock on the market that I know of that can touch Apple over this time period.

      2. It’s not investors, they invest in the company.
        It’s speculators who speculate about the stock price and can they make a quick buck.

        I do both. Long term Apple and some play money to sell (132$) and buy (114$). $18 profit per share. Just so fun 😄

  2. I am seriously going to consider Apple’s upgrade program. I will need to sit down and look at the cost vs. ATT Next program. The key will be what the combined cost will be.

    1. I can tell you with 100% certainty, the Apple iPhone Upgrade Program is way better than ATT Next. It includes AppleCare and the unlocked iPhone may be moved from carrier to carrier all you like including the $13 a month Consumer Cellular that uses the same ATT network including all the LTE towers.💥😃🎉

  3. It’s not possible for Apple to rally 50% based on that. 5% might be possible but not 50%. Apple’s share price is probably being held down deliberately and not based on some of the things always being talked about. I can’t believe there are that many investors who have these exaggerated fears Apple will be unable to sell iPhones in the future. There has to be something else going on.

    Everything about Apple indicates there isn’t a drastic slowdown in iPhone sales or company growth with increased hiring of employees and opening of more retail stores. Nothing really adds up when it comes to Wall Street’s low valuation of Apple. Do investors really shun companies that offer a sure 10% growth a year and only go for companies that offer 30%+ growth. That’s just crazy in terms of greed.

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