UBS analyst David Vogt on Wednesday upped his rating on Apple shares to Buy from Neutral, setting a new target of $142, up from $115. The call is directly tied to Vogt’s enthusiasm for the company’s widely-rumored plan (Project Titan) to start making Apple-branded vehicles.
Vogt writes in a research note that the upgrade reflects two primary factors. One, ongoing strength in the iPhone, which he says is benefiting from better average selling prices, as consumers continue to show a preference for the high end of the iPhone 12 line. And two, he says the higher target reflects “the real option value of Apple’s likely entry into the auto market,” a factor he thinks isn’t reflected in the company’s share price.
“Our analysis of the auto market and Apple’s multi-year investment in the industry (self-driving car licenses and LiDAR patents) suggests to us Apple’s auto optionality is worth at least an incremental $14 a share,” he writes… “From a timing perspective, our upgrade should also capture the relative and absolute outperformance that typically accrues to Apple shares 180 days prior to fall iPhone launches.” Vogt notes that since 2013 (but excluding 2020) Apple shares have rallied 15% in the six month window ahead of Apple’s annual September launch of new phones.
MacDailyNews Note: With some 16.79 billion outstanding shares (an ever-moving target due to Apple’s buyback program), AAPL is valued at $2.06 trillion at the current price of $122.92. If Apple achieves Vogt’s $142 per share target, the company would be worth $2.38 trillion.
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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]