Evercore Analysts Raise Apple Price Target Ahead of Q4 Fiscal Results

An analyst has revised his Apple price target from $247 USD to $153.


Evercore analyst Amit Daryanani (via PED30) believes that there is an “increased sense of ‘I give up’ on the buyside”:

AAPL stock has performed well into this EPS print (+18% since Jun-qtr earnings vs. +0.3% for S&P 500) as expectations for iPhone units have slowly crept higher and there is increased sense of “I give up” on the buyside. Fundamentally, our bullish bias on AAPL reflects:

1) Services acceleration through year- end (vs. street modeling deceleration),
2) better GM upside (vs. street modelling flat),
3) iPhone units seeing upside (though we do think iPhone revenues may see less of an upside given likely ASP headwind) and
4) capital allocation driven EPS tailwinds.

Buyside expectations are for modest upside to iPhone sales (remember, no more units!) but we think two focal points will be a) trajectory of gross- margins (38% would be positive) and b) services growth trends (acceleration would be positive). Also, focus will be on China centric dynamics and iPhone revenues trend line.

Net/Net: We are sticking with our OP rating and raising our price target from $247 to $253 (rolling estimates to FY20, multiple unchanged) as we think the re-rating will sustain and the stock will work higher over 6-12 months as we start to enter the iPhone 5G (hype) supercycle in CY20. Fundamentally, “bears” are playing a tactical 3-month iPhone narrative, while “bulls” will start to get aggressive on any weakness to take advantage of the iPhone 5G narrative that could sustain the stock for 12-24 months.

Daryanani’s note comes two days before Apple reports fiscal fourth-quarter results, after Wednesday’s closing bell.

Last week, UBS analysts raised their price target for Apple to $275 USD from $235, joining fellow Wall Street banks such as Raymond James which was optimistic on 5G and raised its price target to $280 from $250 per share.

Nevertheless, with 15 percent tariffs to be slapped on Apple products shipped into the US from China due to start on 15 December, the bank warned there could be a 10 percent tightening in earnings per share.