Despite its massive $1.3 trillion market valuation, Apple (NASDAQ: AAPL) has continued to show off remarkable gains while other large-cap stocks have slowed down their growth rates.
In 2019 alone, Apple has almost doubled in stock price, something which many analysts expect to continue in 2020. That’s exactly what one long-time analyst has said back on Friday, where he went on to argue that Apple’s stock could rise by another 40% in 2020.
Long-time Apple bull and analyst Gene Munster, who is also managing partner at Loup Ventures, has gone on to say that he considers Apple to be the top tech stock in the country, beating out the likes of Facebook, Amazon, Netflix, and Google. In an article released on Friday, he argues there are five reasons why the stock still has plenty of room to grow.
“When compared to other tech and services companies, we consider the fair value for AAPL to be $350-$400. For example, applying FB’s current year multiple to shares of AAPL suggests a $395 share price,” wrote Munster. “We believe the base case of $350 (21% upside) is achievable in 2020 and $400 (38% upside) is achievable sometime in 2021 (38% upside).”
The biggest reason he cites as to why Apple will continue to do well is that iPhone sales are expected to continue to do well going into the new year. This also includes the fact that five new iPhone models are expected to be released in 2020. At the same time, he specifically mentions the ongoing growth of the Apple Watch, with wearables continuing to account for an ever-increasing portion of the company’s revenues.
Munster also mentions something that not as many other analysts are mentioning, which is the move to 5G networks. As the move 5G continues to loom on the horizon, investors and consumers alike are likely to consider buying a new phone to fully take advantage of this. Now to what extent 5G will help increase iPhone sales is uncertain, but Munster speculates that it might give a short-term sales bump of as much as 10%.
Overall, analysts remain highly optimistic about Apple’s prospects as the stock continues to do well. Out of the 45 or so Wall Street experts covering the stock, well over half of them have a bullish “buy” rating on the stock, while only a handful have either a “hold” or a “sell” rating.
Apple Company Profile
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Card, and Apple Pay, among others. Apple’s products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple’s products are distributed online as well as through company-owned stores and third-party retailers. The company generates about 40% of its revenue from the Americas, with the remainder earned internationally. – Warrior Trading News
