Apple ()
Apple (AAPL) is poised to become a $1 trillion dollar company, according to prominent Wall Street analysts.
It would seem the Cupertino-based tech giant, which crushed its second quarter earnings report, can do no wrong. And now analysts are seemingly racing to see who can one-up each other when issuing their price targets.
Shares of Apple have been on fire, soaring 35% year to date, including almost 5% gains last week, while posting 11% returns this month. The iPhone maker has solidified its ranking as the Dow’s top-performer, beating second place McDonald’s (MCD) (up 19.4%) and third place Visa (V) (up 18.85%). Apple stock closed Friday at $156.10, netting multiple new all-time highs last week. And the company’s recent successes, which has generated an increased level of confidence among investors, has also gotten analysts to be more boastful.
The call of the week came from none other than Drexel Hamilton’s Brian White, who last week issued the Street’s most bullish forecast by raising his 12-month target on AAPL stock to $202 per share. From Friday’s close, White’s price target still represents potential premiums of almost 30%. This would be remarkable, given that Apple has already made investors tons of money with some 72% returns over the past year.
Yet, in a research note issued to investors last week, the analyst called Apple one of the “most underappreciated stocks in the world.” Assuming Apple stock does reach $202 per share, this would value the company at $1 trillion. In other words, White believes Apple’s market cap — currently at $818 billion — can add 23% more in a twelve month span.
Last month, UBS analyst Steven Milunovich outlined a scenario where Apple stock can reach $200 within a couple of years. Milunovich, who has a Buy rating on AAPL stock, said: "For Apple to hit $200, iPhone needs to continue to grow beyond fiscal 2018, new product categories must be established, and buybacks should exceed $50 billion per year, boosting the P/E to 17x.”
The stock is priced at just 15 times fiscal 2018 estimates of $10.40 per share, which is three points lower than the S&P 500 index. When adjusting out Apple’s $257 billion in the cash, Apple’s P/E drops to single digits. In other words, it’s easy to see how AAPL stock remains the market’s best bargain. And while Apple was the first U.S. company to ever reach the $800 billion market cap milestone, will it be the first to make it to $1 trillion? Both Alphabet (GOOGL) and Amazon (AMZN) might have something to say about that.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
