How Apple (AAPL) Will Look Like in 2025? Top Analyst Answers


The RBC Capital team has published its “Imagine: 2025” portfolio report of 75 stocks primed for the future. The overarching goal of the report is to challenge management and investor thinking, creating a framework to help anticipate which companies will be on their front foot strategically.

“Leadership decisions today may well determine a company’s fate in 2025, as the historical change examples illustrated throughout this report demonstrate,” says RBC.

We don’t have time to cover all of RBC’s picks and pans today, but let’s at least survey Apple (NASDAQ:AAPL), and see if we can figure out why the brokerage firm likes the tech stock, which will most likely win the race to a $1 trillion market cap by 2025.

RBC Capital’s top analyst Amit Daryanani wrote, “AAPL services could leverage how intimately they know their consumer to provide valuable, personalized and highly curated services (by 2025 we could see the 1 st generation that has grown up on iOS with their entire digital footprint on AAPL!) . By 2025, we could see (and arguably we are already seeing seeds of this) AAPL looking at iPhones as merely a means of expanding the install base with the real monetization being done via services. Services is on track to become a ~$50B business by 2020, and we think Apple eventually transforms from a device to a services company. While straight line projections are not how things unfold, if Services maintains a high-teens growth rate while non-services businesses grow at low-single-digits, we estimate that Services would constitute ~30% of AAPL’s business (50%+ in profits) in 2025 . Along the way, there would undoubtedly be speed bumps and risks like competition, disruption and regulations. But we also see ramp-ups through acquisitions and new business models.”

Net net, Daryanani reiterates an Outperform rating on Apple shares, with a price target of $210, which represents a potential upside of 10% from where the stock is currently trading. Daryanani’s picks have a 25.6% one-year average return with a 81% success rate, according to analyst ranking service TipRanks, placing him at the top 50 of all Wall Street analysts covering any industry.

 

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