Apple Analyst
Daniel Ives maintained an Outperform rating on Apple and increased the price target from $185 to $200, suggesting more than 20 percent upside from current levels.Apple Thesis
Wedbush iPhone 13 checks point to much stronger than expected uptake, reinforcing the firm’s belief that Apple is on track to sell over 40 million iPhones during the holiday season despite the chip shortage headwinds, Ives said in a note.While the Street has been focused on the impact of chip shortage on Apple, the underlying iPhone 13 demand story, both domestically and in China is trending well ahead of Street expectations, the analyst said.
The pent-up demand story for Cupertino is still being underestimated by investors with chip issues a transitory issue, according to the analyst.
In China alone there are about 15 million iPhone 13 upgrades for the December quarter, Ives said. This region remains a major source of strength for Apple, heading into 2022 and beyond.
“While macro/Fed and Omicron worries will rule the day in the near-term for the Street with market volatility abound, importantly the fundamental story for Apple is strengthening into 2022 on the heels of the most robust Cupertino product cycle in the last decade,” Ives wrote in the note.
The Services business is worth $1.5 trillion and this $75 billion + annual revenue stream is showing no signs of slowing down, the analyst said.
The risk/reward, the analyst said, is very favorable at current levels for this “safety blanket” tech stalwart during this market storm. On a sum-of-the-parts valuation Apple is well on its way to being a $3 trillion market cap during 2022 as the Street catches up to this growth story.
