Bank of America Securities analyst Wamsi Mohan has raised his Apple price target to $470 from $420, but downgraded Apple’s stock from “buy” to “neutral,” citing a new balance to risk and reward as the stock has hit new highs following Apple’s Street-destroying earnings report.
In a note to investors seen by AppleInsider, Mohan is now no longer underwater at $470 per share, but has reclassified the stock as neutral versus buy, since he sees the stock as more balanced than it has been previously.
Mohan’s new $470 Apple stock price target assumes single-digit year over year revenue grown, and flat margins from hardware for the fall, including the “iPhone 12.” Like other analysts, Mohan believes that there will be “high-teens” year over year growth in services, and an increase in services margins.
To support a $17 earnings per share, Mohan believes that $6 of that will come from Services with a 40x earnings per share multiple, with the remaining $11 being delivered from hardware at a 20x earnings per share.
MacDailyNews Take: For Apple’s just reported fiscal Q320, Bank of America’s Mohan predicted $51.7 billion in revenue, with $1.89 EPS vs. Apple’s actual $59.7 billion in revenue and $2.58 EPS. Not even close, Wamsi.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]