2020 has been kind to Apple (AAPL). Since the year kicked off, shares have skyrocketed 60%, and investors are wondering if there’s still more fuel left in the tank. Tigress Financial analyst Ivan Feinseth is among those saying there’s plenty of room for growth.
The 5-star analyst believes “strong product demand, accelerating Services revenue growth along with the 5G-enabled iPhone 12 and the new M1 Processor introduction will continue to drive further share price gains.”
While the launch of the 5G enabled iPhone 12 has been the lynchpin for the Apple bull case in 2020, Feinseth counts other growth opportunities amongst Apple’s ever-expanding ecosystem.
The tech giant recently unveiled its new line up of Macs boasting its “in-house designed revolutionary M1 Processor.” Feinseth notes how it has been racking up glowing reviews and counts “incredible performance and power efficiency” as its distinguishing features. The analyst argues its “remarkably complex chip with a record 16 billion processors” will herald “a new class of computers” for Apple’s Mac line-up and act as a “tremendous tailwind in 2021 and beyond.”
Feinseth also expects Apple’s increasingly important Services segment – which includes the App Store, Apple Arcade, Apple Music, Apple Podcasts and Apple TV+ – to keep on outperforming.
In the latest quarterly report, Services revenue increased by 16% year-over-year to a record $14.5 billion. Feinseth believes the segment “could easily exceed $60 billion in the next 12 months, with the potential to more than double over the next few years as AAPL continues to penetrate its installed device user base of over 1.5 billion.”
Furthermore, with a strong balance sheet boasting $179.90 billion in excess cash and projected to add $123.23 billion in Economic Operating Cash Flow (EBITDAR) over the next twelve months, Feinseth expects Apple to keep on funding “new growth initiatives and strategic acquisitions while returning significant amounts of cash to shareholders.”
To this end, Feinseth rates Apple shares a Strong Buy, although he has no fixed price target in mind. (To watch Feinseth’s track record, click here)
While not all Street analysts are onboard the Apple train, most remain bullish on the company’s prospects. The analyst consensus rates the stock a Moderate Buy, based on 23 Buys, 8 Holds and 1 Sell. The average price target hit $125.94 and suggests upside of 9% over the coming months. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.