JPMorgan analyst Samik Chatterjee removed Apple (AAPL) from its analyst focus list on July 27 as he believes near-term upside looks limited. However, he still raised the price target to $425 (12% upside potential) from $365 and reiterated a Buy rating on the stock.
Chatterjee believes that “investors looking for further upside have to focus on the longer-term earnings trajectory rather than expect near-term upside, as the likelihood of an earnings beat in [the June quarter] as well as strong early 5G cycle volumes appear to be priced in.”
The analyst’s lists a number of catalysts for Apple’s stock including “the upcoming 5G iPhone launches, leverage of a strong services portfolio benefitting from [the] large installed base of users, as well as under-appreciated leverage to work from home trends.”
The iPhone maker will report its June-ending quarterly results on Thursday, and Chatterjee expects revenues of $49 billion with earnings of $1.97 a share. He doesn’t expect Apple to provide guidance for the next quarter or disclose the timing for the 5G iPhone launch .
Last week, Goldman Sachs analyst Rod Hall raised his price target to $299 from $263 but warned investors to avoid the stock in the near-term. Meanwhile, Wedbush analyst Daniel Ives raised his price target to $450 from $425, as he expects Apple to become the first $2 trillion company by 2021, primarily driven by the success of iPhone 12.
Currently, the Street has a cautiously optimistic outlook on AAPL. The Moderate Buy analyst consensus is based on 25 Buys, 5 Holds and 2 Sells. The average price target of $373.57 implies downside potential of 1.5%. (See AAPL stock analysis on TipRanks).
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