Apple’s share price added more to recent gains by closing the December 17th session at a new record high of $280.41.
Apple’s relentless upward trajectory is not about to stop anytime soon, either, according to Merrill Lynch’s Wamsi Mohan. The 4-star analyst notes a list of reasons as to why he remains bullish on the world’s biggest company by market cap. Amongst them, the 4-star analyst thinks that valuation remains inexpensive, and that the brand has a loyal user base with a “continued strong demand for iPhones.” Mohan adds that an “attractively priced wearables portfolio… demographic changes in Apple’s favor and strong FCF and capital returns,” all indicate room for expansion.
The upcoming integration of 5G could drive strong growth according to Mohan. He expects Apple to “launch at least one model of the iPhone in the fall of 2020 with 5G capability” and thinks 20 million 5G iPhones will be shipped in C20 (calendar 2020), an increase from the previous forecast of 10 million… The analyst also thinks the 5G launch will be a catalyst for more consistent sales over the next 3 years, estimating sales will reach over 200 million each year between C20-C22.
MacDailyNews Note: Mohan reiterated Merrill Lynch’s Buy rating on shares of Apple and upped the price target from $270 to $290.
What always leaves me puzzled are analysts who say the exact opposite of others. They’re looking at the same company but reach totally different conclusions. I know analysis might not be an exact science but to see such totally differing results for Apple from analysis is hard for me to understand. Those analysts who have Sell recommendations for a stock that is doing so well should re-evaluate their analysis because they must be doing something very wrong to be missing so badly. They would have had to lose all credibility as decent analysts by now. And if they can’t admit they were wrong then there is definitely a problem.
Because I don’t pay attention to analysts, I’ve done spectacularly well with my AAPL investment over the years. But, unless I misunderstand what a “sell” recommendation is (I think it means “sell now”), from an analyst’s point of view, it seems to me that anytime a stock hits a new high is a good time to advise clients to sell. How can you be wrong? You are advising your client to sell at the peak — and isn’t that what you’re supposed to do to make money in the stock market? But anyone who has followed the ins and outs and ups and downs of AAPL over the years (decades, in my case) will likely recognize that this is not a good time to sell if you don’t have to. And the prospects for the next two years in particular look very good for Apple (and AAPL). But I’m just an amateur, so what do I know? (See my first sentence for the answer to that question.)