Apple shares saw yet another price target raise on 5G demand optimism on Friday, this one from one of the most influential Apple analysts, Morgan Stanley's Katy Huberty.
Apple shares rose 0.47% to $316.72 Friday, as the broader U.S. market also ticked higher.
Huberty raised her price target from $296 to $368 in a note on Friday. "We increasingly view 5G as a more meaningful driver of smartphone upgrades than the market expects, starting in 2020 and accelerating in 2021," Huberty said. "We believe the launch of new 5G devices from top tier smartphone original equipment manufacturers will spur 5G investments from carriers and infrastructure players, which will in turn lead to new 5G launches, creating a virtuous cycle."
Huberty moved her total smartphone shipment growth forecasts for fiscal 2020 higher from 0.6% to 1.5% and for fiscal 2021 from 1.8% to 3.5%. The average analyst is predicting 1.5% growth for fiscal 2020 and 2.4% growth for fiscal 2021.
She added that her prior forecast of 203 million iPhone shipments in fiscal 2021, representing 7% year-over-year growth, is "conservative" because it implies a lower growth rate for the first calendar half of 2021 than what is normal for upgrade cycles. She now has raised her shipment estimate for 2021 to 215 million units, a 13% increase. She also raised her fiscal 2020 iPhone average selling price estimate, which Apple no longer supplies, from $745 to $760.
Overall, Huberty raised her 2021 revenue estimate from $307 billion to $320 billion and her 2021 earnings per share estimate from $15.53 to $16.55. She kept her multiple on 2021 EPS at just above 22, a higher multiple than many other analysts.
Huberty was one of the first analysts in early 2018 to predict that Apple's Services upside would bring the stock back to growth status, as the smartphone market began to mature.