Analyst: Apple shares could rise 10% in 6 months

Apple shareholders, “don’t sell yet,” Jack Hough reports for Barron’s. “Wait at least until the end of summer — apple-harvesting season in our home state of New York — when buzz for the coming 10-year anniversary iPhone is likely to hit a peak. Apple shares could return another 10% by then.”

“Services have brought in $25.5 billion in the past year, or more than 12% of revenue,” Hough reports. “Apple now makes more from services than from Mac computers. In the latest fiscal year, services revenue surged 22%, in part because Apple’s iPhone upgrade program cleverly packages an AppleCare service plan into the monthly installment payments.”

“AppleCare and related services now bring in 1.9% of total revenue, estimates Amit Daryanani, who covers Apple for RBC Capital. Other big contributors are iTunes, including movie rentals, and Apple Music, a streaming service, which combined deliver 2.5% of revenue; iCloud, Apple Pay, iAd, and such, which bring in 2.7%; and the app store — ‘the world’s greatest toll booth,’ according to Daryanani — at 3.9% of revenue,” Hough reports. “Daryanani reckons that swelling annuity makes the stock worth 17 times forward earnings, closer to where software and services companies like Microsoft and Alphabet trade. Apple is trading below 15 times forward earnings. Cash and investments have grown to $46 a share. Last Tuesday, Daryanani bumped his price target to $155 from $140.”

Read more in the full article here.

MacDailyNews Take: Just 10%?

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]

10 Comments

  1. Don’t sell yet because of a could based on improbable speculation.

    Uh huh, well how about holding on to it for a decade mr analysis? Someone looked at that last year. Apple came in number 6. Not too shabby (920% price change).

  2. What about the next budget? What about repatriation of cash at something less than 40%? What about the value of that, as in the potential for special dividends? What about the fact that Apple Inc. has more cash offshore than any other multinational? What about its low P/E ratio compared, say to MSFT? So sell and forget about all that?

    1. The only pertinent question, imo, is the veracity of TC’s comments about the pipeline. If there’s merit in the statement and true innovation is revealed, the future is more than bright for Apple and holders of AAPL.

      1. Tim Cook can only be vague about what’s in the pipeline and I can understand that to some degree. Apple doesn’t need to be tipping its hand to rivals or the news media who’ll only blow things out of proportion. What can a CEO say about what’s in the pipeline? Saying something wonderful is coming is what a CEO is expected to say about his company.

  3. It’s good to be optimistic, but I’m not holding my breath for it to happen. I’d like to see Apple’s share price steadily rise, but I would think there needs to be improvement in Apple’s revenue stream. It’s definitely fun to hear good news for Apple after listening for a couple of years about doom and gloom.

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