Apple Inc. (AAPL) stock is up more than 20% year to date and climbed to yet another record closing high on Thursday, ending the day at $140.69 to beat the last closing high set earlier in the week. Investors seem cheered by Wall Street’s promises about the iPhone 8, and now some fresh data on iPhone sales suggests better-than-seasonal activity. Analysts also cheered the prospect of a cash repatriation holiday and its potential impact on Apple Inc. (AAPL).
Apple Inc. (AAPL) stock price target boosted
Pacific Crest analyst Andy Hargreaves raised his bull-case price target for Apple Inc. (AAPL) stock to $175 per share based on the prospect of a cash repatriation holiday. This is a common song on Wall Street these days, as is the iPhone 8. Despite the increase in his bull case, the analyst left his base case for Apple Inc. (AAPL) stock the same at $140 per share.
If President Trump manages to deliver on his campaign promise of a tax holiday for cash repatriation, Hargreaves estimates that Apple Inc. (AAPL) could add $204 billion to its cash stash in the U.S., bringing it to $220 billion. He adds that bringing all that cash home without paying hefty taxes on it could enable the iPhone maker to “comfortably double or triple its regular dividend and still make a meaningful acquisition without impairing its balance sheet.”
This hedge fund is so optimistic about COVID-19 that they’re short Clorox [In-Depth]
A lot has happened since the coronavirus pandemic began, but aside from the temporary selloff in March, the stock market has continued to hum along as if nothing has been happening. There's no denying that the financial markets have been changed by the pandemic, and investors should be thinking differently when it comes to investing Read More
That would bring its current dividend of $2.28 per share to $4.56 per share if it’s doubled, and a dividend increase could provide support for Apple Inc. (AAPL) stock if the iPhone 8 cycle doesn’t turn out to be as great as analysts have been gushing about. As Apple Inc. (AAPL) stock has been setting more and more record highs, Hargreaves and a few other analysts have begun to caution investors about expecting too much from this year’s iPhones.
Solid iPhone supply chain data
In a research note dated March 15, Goldman Sachs analyst Simona Jankowski reiterated her Buy rating and $150 price target on Apple Inc. (AAPL) stock and released fresh supply chain data on the iPhone and also some sales data points from China. She said supply chain data points to higher-than-usual seasonality in February based on average sales from six of the company’s suppliers.
The suppliers reported a 27% year over year increase in sales, on average. Month over month, the average decline was 18%, but that was much better than the three-year average decline of 34%. Jankowski continues to project 52.8 million iPhone units for the March quarter, which is ahead of the consensus a 52.1 million. She added that even her estimate could be low if the higher-than-seasonal supply chain trends continue.
China shipments are also strong
Apple Inc. (AAPL) is also showing strength in China, a key market where it has been struggling for about the last year Jankowski said that data from China’s Ministry of Industry and Information indicates that smartphone shipments during the first two months of this year rose 12% year over year to 72.8 million. She added that Android smartphone shipments rose only 5% year over year, while non-Android smartphone shipments jumped 50% to 14.5 million.
She feels that this could mean iPhone shipments in China have recovered because iPhones make up most of the non-Android shipments. If she’s correct, it means Apple Inc. (AAPL) didn’t need the iPhone 8 to spur growth there after all.
Shares of Apple Inc. (AAPL) stock edged downward by as much as 0.11% to $140.54 during regular trading hours on Friday.