iPhone Designer Jony Ive Leaves Apple (AAPL): What Wall Street’s Saying
Apple (AAPL) announced yesterday that Jony Ive, Apple’s chief design officer, will depart from the company to form an independent design company called LoveFrom with Apple as one of its primary clients. Ive has worked at Apple since 1992 and worked on a variety of projects, including the iMac, iPhone, and most recent Apple Park, Apple’s new headquarters. Ive has held the title of chief design officer (CDO) since 2015, and no successor to that role was immediately named.
Wedbush’s Daniel Ives commented, “Our initial take is this move by Ive is a “surprise to the Street” as it is a major changing of the guard within Cupertino. Ive is leaving a hole in the company and is clearly irreplaceable as he has been one of the most important figures at Apple throughout the past few decades; from his iMac vision to the stunning iPhone launch and transformation his fingerprints are deeply woven within Apple’s core DNA. The major question now going forward is around future product innovation with one of the key visionaries of the Apple brand gone.”
“In our opinion this news only adds to the current agita around the Apple story as the company is branching out into television and gaming all while it is currently the poster child for the US/ China UFC trade battle on the heels of the G20 summit. While this is a bit if a shocker to Apple and its investors we are not overly concerned as Ive will continue to work closely with Cook & Co. We continue to believe the risk/reward in Apple’s shares is compelling at current levels and also view this name as the most safe from antitrust swirls vs. some of its FAANG brethren with the Beltway now putting a brighter spotlight on big tech stalwarts,” Ives added.
Ives reiterates an Outperform rating on Apple stock, with a $235 price target, which implies nearly 19% upside from current levels. (To watch Ives’ track record, click here)
Tech expert Gene Munster actually believes the news of Jony Ive leaving Apple came as no surprise, as he has been less involved in products over the past four years. Munster points out that “Apple is using Ive’s departure as an opportunity to elevate Jeff Williams’ role instead of prioritizing clear design leadership. We believe this is an early step toward Tim Cook laying the groundwork for his succession plan, which is five to ten years away. Having the design team report to Williams fulfills a prerequisite for eventually assuming the CEO role.”
Overall, Wall Street sizes up AAPL as a ‘Moderate Buy’ stock, as the bulls edge out the cautious on the tech giant. In the last 3 months, Apple stock has received 19 bullish ratings versus 15 analysts hedging their bets, and only two bears who bet heavily against the stock. The 12-month average price target of $212.90 reflects an upside potential of nearly 8%. (See AAPL’s price targets and analyst ratings on TipRanks)