The rally that drove
Shares up 86% in 2019.
On Monday, Apple's stock (ticker: AAPL) continued to push to a record level, which D.A. Davidson analyst Tom Forte raised his price target for Apple shares from $ 300 to $ 375 and repeated his buy rating for the share. In a research note on Monday morning entitled "5G (good) reasons why there may be more petrol left in the AAPL tank," Forte specifically addresses expectations for the expected launch of 5G iPhones later this year.
Here is his list of five reasons to stay optimistic:
1. Apple should be able to generate positive growth in smartphone units at least in the next two product cycles when 5G comes out, he says.
2. New opportunities for video streaming, financial services and healthcare. "In our view, the ripening of the smartphone market was one of the best events for Apple afterwards, as the company was forced to use unimagined opportunities to drive future growth," he writes.
3. Apple Card iPhone Upgrade: "One of the benefits for consumers who signed up for an Apple Card (a branded credit card) is the ability to buy an iPhone and pay in monthly installments without paying interest ", he writes. "We believe this could be a catalyst for iPhone unit sales for several years."
4. Motivated network operators who are introducing 5G: "We believe that Apple should benefit from the desire of mobile operators to generate income from their substantial investment in infrastructure and frequency so that 5G can become a reality," he writes. "As a result, they may offer consumers greater incentives to upgrade their devices to get the most out of their 5G networks."
5. Buybacks: "While this likely contributed to the stock's strong year 2019, Apple ended the September quarter of 2019 with $ 79 billion remaining on its last share buyback approval."
Forte also points out two risks to Apple stocks. The first are high hopes. He found that[the] In our view, the launch of the iPhone 11 had the lowest expectations in its history. For comparison: the expectations for the share and the next product launch of the iPhone are much higher. "
The second risk for Apple is the tariffs. He "is still monitoring whether tariffs can negatively impact Apple's operating performance. We see this as an ongoing risk to the stock if there is no full US-China deal."
Apple stocks rose 0.6% to $ 312.16 on Monday morning. The share rose by around 6% by 2020.
Write to Eric J. Savitz at email@example.com