Apple Inc. (AAPL) stock roared to a new high of $153.70 per share after one perma-bull significantly boosted his price target, effectively forecasting that the iPhone maker will be worth $1 trillion within the next 12 months. However, he’s not the only one who sees incredible value in the company right now as Warren Buffett continues to talk up the stock.
Apple Inc. (AAPL) stock price target boosted to $202
In a research note dated today, Drexel Hamilton analyst Brian White said he has raised his price target on Apple Inc. (AAPL) stock from $185 to a Street-high target of $202 because of improving sentiment around the company. Trading in Apple Inc. (AAPL) stock was heavy on Monday as more than 36.3 million shares had changed hands by the afternoon hours. For comparison, the average daily volume is 23.27 million shares, according to Google Finance.
White feels that the improvements in sentiment are “in the early stages of unfolding” and thus sees “attractive upside” in Apple Inc. (AAPL) stock. He notes that investors are extremely focused on the fall release of the iPhone 8 (and how could they not be since every analyst covering the company is). Other key areas of focus are the increased capital return plan, “depressed valuation and potential new innovations.” As such, he feels that Apple’s summer earnings report will be less important.
When portfolio managers get started in the business, their investing style often changes over the years. However, when Will Nasgovitz bought his first stock when he was 12, he was already zeroing in on value investing, and he didn't even know it. Nasgovitz has been with mutual fund manager Heartland Advisors for almost 20 years, Read More
Apple bounces back
According to White, the iPhone maker’s valuation “has been depressed for years” because investors were worried that the company would “fall victim to the missteps of consumer electronic companies of the past.” However, he feels that Apple has proven that it can develop devices that all work together seamlessly. As a result, he believes that the company will be able take advantage of the current Internet of Things trend by turning more things into a computer.
The analyst noted that last year, investors thought their fears were validated because of the year over year decline in iPhone units in the March 2016 quarter. That was the first time the company experienced a decline in units for the phone. In all of fiscal 2016, iPhone units fell 8% year over year, but White describes that decline as “the hangover effect of 37% iPhone unit growth in FY:15 and driven by pent up demand for the larger iPhone 6.”
Apple approaches $1 trillion valuation
He feels investor sentiment became too negative on Apple Inc. (AAPL) stock “for all the wrong reasons.” Apple Inc. (AAPL)’s market capitalization neared $813 billion by the afternoon hours as its stock held firmly above the $150 mark. White’s 12-month price target values the iPhone maker at $1 trillion, and interestingly, Warren Buffett said earlier this year that Apple Inc. (AAPL) is likely to reach that level before his own firm Berkshire Hathaway.