So apple (AAPL) is having a bad year, you say? Not long ago, the talk on Wall Street was all about the tech giant’s unusually underperforming stocks, especially when compared to some of the other mega-cap displays in 2021.
With stocks hitting an all-time high this week and the performance gap narrowing over the past month, that talk can now be put to rest.
The increase coincided with reports that Apple has ramped up the production rate of its iPhones and instructed manufacturers to build 90 million iPhones this year, a 20% increase from the 75 million units it produced last year.
Apple’s renewed optimism in all things is not surprising to JP Morgan’s Samik Chatterjee. The analyst recently told investors that Apple is well prepared to outperform in 2H21. In fact, the growing confidence Chatterjee has added Apple to the company’s analyst focus list means “a growth idea.”
“Recent momentum, led by better market share, is driving us to also estimate higher sustainable volumes in future quarters, showing us a path to Apple exceeding investor expectations over longer time horizons rather than just the upcoming earnings prints.” , the 5-star analyst said, confirming that Apple is also a top pick.
To reflect the rise in build rates, Chatterjee has “modestly” raised volume expectations for the iPhone, but more important to the analyst is the “path up” for the stock over the medium term.
This is because of the potential for better iPhone 12 sales, but also because of what Chatterjee sees as low expectations for the fall launch of the iPhone 13, which could lead to “another upside.”
It’s a potent mix that will gain allure with the launch of the iPhone SE3 next year and means that Apple can “not only pleasantly surprise with a more robust iPhone 13 cycle, but also have the potential to propel material upwards towards consensus expectations for FY22. ”
To this end, Chatterjee estimates that Apple is Overweight (ie Buy) while raising its target price slightly from $170 to $175. The revised figure, which implies that equities will add 19.5% from current levels. (To view Chatterjee’s track record, click here)
So, that’s JP Morgan’s opinion, what does the rest of the street have in mind for Apple? Based on 20 buys, 5 hold and 2 sales, the stock currently has a consensus rating for moderate buy. Stocks are forecast to rise 8% in the coming months as the average price target is $158.62. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.