Shares of Apple Inc. rallied Friday, as the sharp run-up in prices this year didn’t deter some Wall Street analysts to get even more bullish on the technology giant, citing optimism over the outlook of iPhone sales and the “under-appreciated” opportunity in advertising.
The shares have rocketed 68.5% this year, to make Apple the most valuable U.S. company with a market cap of $1.18 trillion… That stock’s surge hasn’t deterred analyst Dan Ives at Wedbush from saying there’s a lot more room for gains. He reiterated his outperform rating, and raised his stock price target to $325, which is about 22% above current levels, from $300. “While shares are up [more than 65%] year to date, we believe the tech stalwart is still in the midst of a renaissance of iPhone growth heading into 2020 that will further catalyze the stock higher as it gets re-rated from the Street,” Ives wrote in a note to clients.
JPMorgan’s Samik Chatterjee maintained his overweight rating, while bumping up his price target to $290 from $280, saying he’s more bullish because investors have “overlooked” the potential of Apple’s advertising business, as they focused on identifying new avenues of revenue growth for services, such as Apple TV+, Apple Arcade, Apple Pay and Apple Music.
MacDailyNews Take: Even as the world’s most valuable company, Apple has been continually under-appreciated for over a decade.
We’re not sure that most analysts or investors can rally wrap their minds around the vast amounts of money that the machine that Steve Jobs built has generated, is generating, and is capable of generating going forward.
As Jim Cramer has said of AAPL: Own it, don’t trade it. — MacDailyNews, May 3, 2018
I sincerely hope Apple never fully realizes the potential of their “overlooked” advertising business.
This comes from an Apple user and investor.
But I’m sure Wall Street will eventually demand that Apple use any means possible to make more revenue. For instance, no matter how many privacy breaches or fake news problems Facebook has, the stock will continue to climb because they’re making good money from advertising. I believe ads yield very high profit margins. The greedy big investors would surely be happy if Apple made an additional $10B from ads every year. Google is absolutely infested with ads from a user’s standpoint, but it makes investors and analysts very happy. They don’t care about user dissatisfaction, they only care about how much money a company makes. Wall Street will surely want Apple’s Services to be overflowing with ads despite being as annoying as they are.
I think the stock has risen because
a. Apple beat the street
b. Apple have released more products and services recently
c. Apple have toned down their pricing making the products more attractive.
d. Products like AirPods and AppleWatch are having an impact
b and d. are probably the most critical items. The regular release / updates increases the visibility that Apple are continuing innovate and are broadening their portfolio.
I still don’t understand the four Sell ratings Apple has. Does that make sense to anyone? Microsoft, I think, has one or two Sell Ratings. It’s just crazy how either of these companies can have even a single Sell rating. No one should be that stupid and then call themselves competent analysts. Following such people will certainly lead a new investor to the poorhouse. Honestly, telling someone to sell a stock while it’s making such immense gains is downright criminal.
The AAPL stock buy-back plays a part in the rise as well. The cost of money is slow low that Apple opportunistically leverages loan $$ devoted to buy-backs that has compensated (and disguises) the iPh revenue losses.
For sure buy-backs are a savvy business decision, but it shows up illusively as quarterly ESP gains. Yes, I know, one could say the ESP gains from buy-backs aren’t “illusive,” but they aren’t concrete gains because of product sales. I’ll take legal gains, whatever the type, but I’ll take the latter type of gains any day.