Is Apple (AAPL) Raring to ‘Hit the Elusive Trillion-Dollar Club? GBH Shares Two Cents

GBH Insights' Daniel Ives is upbeat on AAPL following a FQ2 earnings show that proved far stronger than bears had anticipated.


After a brief era of poor iPhone X demand rumors, is the Apple Inc. (NASDAQ:AAPL) iPhone product cycle suddenly “alive and well?” It appears this tech titan has gone full zero-to-hero ever since last Tuesday’s favorable second fiscal quarter print that turned worst Street nightmares into dust.

GBH Insights Daniel Ives now underscores the company’s shares as “back on track after June guidance scare,” that brought a month of “dark lows” from iPhone X demand apprehensions running wild. Ultimately, “bears yelling fire in a crowded theater” were left crying wolf for a company that this analyst cheers has breathed new life into the iPhone upgrade thesis.

As such, the analyst reiterates a Highly Attractive ratings on AAPL stock with a $200 price target, which implies a just under 7% upside from current levels. (To watch Ives’ track record, click here)

Moreover, Ives draws attention to Warren Buffet’s stake in Apple revealed last week along with its $100 billion buyback program both tell of “some of the clear tailwinds that Cook & Co. have over the coming year, adding: “We believe the Street is now starting to fully appreciate the massive iPhone upgrade opportunity on the horizon for the next 12 to 18 months with three new smart phones slated for release. […] Importantly we estimate Apple has roughly 350 million iPhones that are in the window of opportunity to upgrade over the next 12 to 18 months, now it’s about which model and price point ‘strike a chord’ for these customers to ultimately upgrade as the iPhone X demand has softened since reaching a supply/balance level in late December.”

Bottom line, “With June/September guidance now hittable/beatable, it appears Apple shares are now on the yellow brick road to hit the elusive trillion-dollar club (followed by Amazon which we believe will hit this mark in 2019) over the coming months in our opinion. Now all eyes are on the trifecta of a major iPhone product cycle for 2018, the recently upped buyback program, and a multiple re-rating that we believe will move shares towards the $200 range over the coming 3-6 months,” Ives contends, betting on what he praises as a “very compelling” risk/reward – even with a “prove me period clearly ahead.”

Wall Street likes the big AAPL machine, according to TipRanks analytics. Consider that out of 28 analysts polled in the last 3 months, 16 are bullish on AAPL while 12 remain sidelined. Yet, is there caution baked into expectations? Worthy of note, the stock’s consensus target price stands at $193.00, marking a slight almost 4% in return potential for the stock.

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