With a market cap of $2.43 trillion, Apple (AAPL) is the world’s biggest company – the giant amongst giants. While most on the Street foresee more growth on the horizon, one analyst has just taken expectations to the next level.
Tigress’ Ivan Feinseth has just reiterated a Strong Buy rating for the tech behemoth and attached a Street-high price target of $198. The implication for investors? Upside of 35% from current levels. (To watch Feinseth’s track record, click here)
The 5-star analyst counts “strong product demand, new product introductions, and accelerating Services revenue” as the basis for his bullish take, all which will “continue to drive significant revenue and Economic Profit growth.”
If it’s product and innovation you’re after, then you might as well head straight to the iPhone – or more specifically, the iPhone 13, to be launched this Friday (Sep 24).
“For relatively the same price points as comparable iPhone 12 models,” says the 5-star analyst, “The new iPhone 13 models give consumers higher resolution cameras and screens, faster processors, increased functionality, more storage, and longer battery life.” Apple appears confident its latest model is destined for success. Earlier this month, the company instructed its suppliers to up the iPhone production’s initial run rate to 90 million units, a 20% increase on the initial 75 million unit runway of the iPhone 12.
The new model was unveiled at the recent California Streaming event, where the company also introduced the Apple Watch Series 7 and a new iPad and iPad mini.
Each new product introduced provides “significant value, increased functionality, and 5G high-speed connectivity to continue driving the current upgrade supercycle,” say Feinseth. All contribute toward further growing Apple’s constantly expanding ecosystem and add to the “highly profitable and fast-growing Services revenues.”
Talking of the Services segment, here Apple “continues to make strategic acquisitions to enhance its Services offerings and product portfolio.”
Last year, the company added Canadian payment startup Mobeewave to its roster, an acquisition which has allowed Apple to turn the iPhone into a portable payment terminal and which further enhances the company’s mobile payment and financial services capabilities. Broadcast platform creator Subverse also came onboard last year and further adding to its “media creation and distribution capabilities,” so has “virtual reality theme park experience creator” Spaces. Furthermore, to handle enterprise-based software upgrades, Apple has also acquired software company Fleetsmith.
To top it all off, there is a mighty balance sheet boasting $177.49 billion – or $10.67 per share – in excess cash which in addition to the estimated $163.81 billion in Economic Operating Cash Flow (EBITDAR) the company is expected to generate over the next 12 months, will allow for the “continued funding of new growth initiatives and strategic acquisitions while returning significant amounts of cash to shareholders.”
So, that’s Tigress’ bullish view, but what does the rest of the Street make of Apple’s prospects? Based on 19 Buys vs. 6 Holds, the stock has a Strong Buy consensus rating. While the average price target is not quite as high as Feinseth’s, at $169.64, the figure is expected to reward investors with 15.5% returns in the year ahead. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
