Wedbush analyst Dan Ives says Apple has a ‘once in a decade’ opportunity to capitalize on iPhone upgrades as 5G networks roll out around the world, ups his price target to $600, and argues a bull case of $700 per share for the world’s most valuable company.
Ives says around 350 million of the 950 million iPhones in circulation could be upgraded over the next 12 to 18 months, with around 20% of those coming from China, arguably Apple’s most important market.
“China remains a key ingredient in Apple’s recipe for success (and) to this point we are seeing considerable strength from the China region over the last few months with positive trends heading into the fall, an impressive trajectory we expect to continue heading into the next 6 to 9 months,” Ives said. “Despite the noise, based on our recent discussions with contacts within the Beltway we strongly believe the WeChat ban will not negatively impact or disrupt Apple’s iPhone ecosystem within the key China market.”
Ives says his ‘bull case’ for Apple includes a price target of $700 per share, a value he sees as realistic given that the iPhone 12 “represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment in our opinion.”
“We still believe many on the Street are underestimating the massive pent-up demand around this supercycle for Apple, which remains the opportunity for the bulls heading into 2021 as this monetization engine heads into its next gear,” Ives said.
MacDailyNews Take: Yup.
Apple’s services will continue to grow and the multi-year 5G iPhone super cycle looms, as the effects from the China coronavirus wane. — MacDailyNews, February 18, 2020