Apple Edges Higher After JPMorgan Price Target Lift, iPhone Shipment Boost
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Apple Inc. (AAPL) - Get Report shares revered earlier pre-market declines Tuesday after analysts at JPMorgan boosted their price target on the stock, citing an "incrementally positive" outlook for iPhone shipments next year.
JPMorgan analyst Samik Chatterjee bumped his price target on Apple by $6 a share, to $239 each, and kept his overweight rating in place, arguing that the company could "pull an additional lever" in terms of renewed demand with a legacy iPhone 9 or iPhone SE model that would boost its value offering.
Chatterjee also lifted his forecast for 2020 iPhone shipments to 195 million units, up from the estimated 180 million unit its expected to shift in the 2019 year that ends in September. He also sees 2020 earnings of around $13 per share, a figure he sees rising to $15.10 in 2021.
"Our positive volume outlook for 2020 is driven by our current expectation for the launch of four iPhone models (as well as ) more significant spec upgrades," Chatterjee wrote.
Apple shares were marked 0.13% higher at the start of trading Tuesday, after falling more than 2% yesterday and languishing during the after-hours session, to open at $200.31 each.
JPMorgan's robust iPhone outlook contrasts with a gloomier assessment yesterday from Rosenblatt Securities' Jun Zhang, who downgraded the stock to "sell" from "neutral" amid concern for weakening iPhone demand and slower service revenue growth over the second half of the year.
Zhang maintained his $150 per share price target, but cited what he sees as a "fundamental deterioration over the next 6 to 12 months" for the iPhone maker, which reports third quarter earnings on July 30.
"Adding to our 'sell' thesis, we believe new iPhone sales will be disappointing, iPad sales growth will slow in the second half of 2019, other product sales growth, such as the HomePod, AirPod, and Apple Watch, may not be meaningful to support total revenue growth," he wrote.