“Only Apple Inc. gets to decide what to charge for its new iPhone, but investors will get to decide what the new flagship is worth,” Dan Gallagher writes for The Wall Street Journal. “That could be a trillion-dollar question.”
“The market value of the world’s most valuable company already has surged 35% this year, to around $820 billion, ahead of Apple’s expected introduction of the new iPhones on Tuesday,” Gallagher writes. “That means the stock needs to gain another 22% — to about $193.70 — to get Apple’s market value to the $1 trillion mark. And, while its heavy dependence on the iPhone has made Apple’s stock rather cyclical over the last five years, the price tends to go up instead of down in the immediate months that follow a new launch of new devices.”
“Apple’s stock currently trades about 14.7 times 2018’s projected earnings, which is already on the high side of its 5-year range,” Gallagher writes. “A market cap of $1 trillion would represent nearly 18 times forward earnings based on current estimates, which is well above the stock’s peak multiple. Apple remains the cheapest of its Big Tech peers—especially when accounting for its $165 billion of net cash—so a strong iPhone cycle could give the stock some additional upside.”
Read more in the full article here.
MacDailyNews Take: Apple is undervalued as usual.
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