“Despite crashing as much as 10% from a closing high set just over a month ago and losing its $1 trillion market-capitalization crown, tech behemoth Apple Inc. is poised for a big rebound, according to Wedbush Securities analyst Daniel Ives,” Matthew Johnston writes for Investopedia. “‘We continue to encourage investors to see the forest through the trees on this name and view last week as the first step in the ultimate re-rating of the stock higher over the coming years,’ wrote Ives, reaffirming his $310 price target on Apple’s stock, according to Barron’s, implying 48% upside.”
“Urging “investors not to lose sight of the massive metamorphosis on the horizon at Apple being led by the services business,” Ives predicted that Apple’s service offerings, including the App Store, Apple Music, and Apple Pay, would all grow annually by a rate of 20%,” Johnston writes. “He also expects sales from these service businesses to rise more than $50 billion by fiscal year 2020.”
Read more in the full article here.
MacDailyNews Take: Wedbush’s Ives seems to be able to grasp the enormity of Apple’s Services’ potential.
Except that Apple’s potential for services really isn’t “Enormous” because virtually all of it is tied to iOS.
So if iOS loses customer favor and falters, so too will “99%” of these Service revenues follow with it.
Structurally, Apple is dangerously UNbalanced in their product portfolio, and splitting iOS hardware from iOS software/services only serves to obfuscate their strategic vulnerability.
IOS product sales would have to decline markedly and for some time for that to happen as installed base will stay extremely positive even growing for quite sometime. Equally, services are not restricted to iPhones or indeed iOS even if they are at the core. Indeed the big change soon will be the streaming service which will no doubt give an upside to all sorts of Apple products (perhaps new ones even) and likely beyond the Apple brand in time. So while this article seems arguably exceedingly optimistic your take is pessimistic and I consider baselessly so, being overly negative in equal measure.
I hear you, but I also watched prior smart-ish phone companies … RIM, Palm, Nokia … lose their customer appeal and crash. And because the cellphone business hardware has a relatively short half-life, I can see the potential for more than a 50% unit sales decline in but ~3 years.
And because Services are so strongly linked to IOS today, they’re at high risk of spiraling right along with the hardware. It just isn’t independent.
Agreed. iOS is kindergarten to Mac OS and as Apple is now HIDING iOS device sales numbers obviously the decline has begun. If they ramped up full throttle Mac production will certainly add billions to the bottom line. But Tim is more interested in stickers and emojis so I’m guessing until a new breakthrough product is released, the decline will continue, sorry….
I’m optimistic about Apple’s future but 48%?
That’s what you call a fanboy pumping the stock.
300 is crazy fan-boyish ?
How about 280?
Mind you we had all time high of 233 a few weejs ago.
$310 a share?!! A 48% share gain is just crazy for Apple. I thought maybe he meant 4.8% and simply left out the point. I don’t mind a little bit of cheer-leading but this amount is ridiculous. Is this dude related to Brian White? Even a 10% share gain sounds great to me as long as that number is sustainable. As Apple is reducing outstanding share count it will be a bit harder to regain that trillion-dollar mark again.
I also think Apple’s portfolio is rather unbalanced and such heavy dependence on a single product where the market is nearly saturated seems a bit foolhardy especially when you’ve got jackass investors constantly counting quarterly unit sales as though their lives depended upon it.
Until I’m ready to sell my Apple stock, I’m happy with collecting those decent dividends. If Apple continues to deliver even small revenue and growth each year, I’m grateful because I don’t think any company can do that much better than Apple for a decade or so.
I’ve given up on Apple ever getting praise the way the FANG stocks do, so my expectations have been lowered quite a bit. Apple isn’t all that hungry for growth anymore and seems content to coast most of the time. Maybe a company has a right to coast every so often but when a company is loaded with cash, a large acquisition every so often couldn’t hurt. Apple is doing OK, but iPhone unit sales seem to be quite a weak link for Apple shareholders and I don’t think that’s going to change any time soon.
Never say never…
https://www.investopedia.com/articles/markets/021316/if-you-had-purchased-100-apple-2002-aapl.asp
Delusional. Jobs took Apple from the bottom of its worst days to the peak of the iPhone boom.
Cook has coasted ever since. Incremental thinner iOS gadgets don’t grow any company 48%, not even Apple.
On that we can agree 100%…