Apple Inc. (AAPL) – Get Report shares could test the $200 level next year, Wedbush analysts said Wednesday after boosting their price target on the world’s most valuable tech company heading into the peak of holiday shopping season.
Wedbush analyst Dan Ives, a long time Apple supporter, lifted his price target on the group by $10 per share, to $160 per share — the highest on Wall Street — with a new ‘bull case’ level of $200 and an outperform rating, citing “a clear uptick” in iPhone demand in both the U.S. and China.
Ives said sales of the iPhone 12, launched in October, could approach the 80 million to 85 million unit level by next year, well ahead of his prior forecast of between 65 million and 70 million, based on supply chain observations and improving demand.
“With more order activity kicking in over the last few weeks for iPhone 12 our initial reads are very bullish and give us incremental confidence in our supercycle thesis on iPhone 12,” Ives said. “We have not seen a launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis. Based on lead times on the Apple website as well as our checks, we believe pre-orders tracked more than 2x its predecessor iPhone 11 thus far and is a robust start out of the gates for Cupertino on this flagship supercycle product.”
“Importantly, with our estimation that 350 million of 950 million iPhones worldwide are currently in the window of an upgrade opportunity, we believe this will translate into an unprecedented upgrade cycle for Apple with a major holiday season on the horizon,” he added.
Apple shares were marked 0.2% lower in pre-market trading Wednesday to indicate an opening bell price of $124.60 each, a move that would peg the stock’s six-month gain at around 45%.
Last month, Foxconn Technology Group (FXCNY) , the world’s biggest electronics manufacturer and Apple’s most important supplier, posted stronger-than-expected third quarter profits and forecast solid revenues for the coming year amid an expected jump in post-pandemic demand for new smartphones and laptops.
Foxconn said it sees current-quarter revenues within a range of -3% to +3% when compared to last year, but notes that 2021 sales will grow by around 10% amid what it sees as strong demand for consumer electronics in general and the iPhone 12 more specifically. Apple typically accounts for around half of Taiwan-based Foxconn’s annual revenue.