Wedbush raised the price target on Apple stock to a ‘Street High’ of $515 (15.9% upside potential) from $475, citing positive demand trends ahead of the iPhone 12 super cycle launch in October.
Wedbush analyst Daniel Ives also set a $600 bull case on Apple (AAPL) stock, and maintained a Buy rating. Ives stated that the the firm was previously expecting “4 models with a mix of 4G/5G for the iPhone 12 unveil, however now based on supply chain checks they are expecting only 5G models for the Fall launch”.
“A new 4G model could potentially hit the market with lower price points in early 2021,” the analyst said adding that “roughly 20% of iPhone upgrades will be coming from this [China] region over the coming year.” He expects the company to hit $2 trillion market cap in the near term.
While Wedbush is bullish on Apple’s iPhone 12 launch, Merrill Lynch analyst Wamsi Mohan is concerned about margin risks in 2021, given higher material costs related to 5G iPhones and increased pressure on unit volumes. He also believes that Apple shares are “already trading at the highest premium to SPX in 10 years and consumer staples multiples.” Mohan downgraded Apple to Hold from Buy on Aug. 5 but lifted his price target to $470 (5.8% upside potential) from $420.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 23 Buys, 6 Holds, and 2 Sells. Given the year-to-date stock price increase of 52.4%, the average price target of $428.62 implies downside potential of 3.6%. (See AAPL stock analysis on TipRanks).