iPhone maker Apple (AAPL) - Get Report on Tuesday received a price-target lift from well-known Wedbush Securities analyst Daniel Ives, who believes the rollout of the iPhone 12 this fall should “start the road to recovery” for Apple.
In a note to clients, Ives raised his one-year price target on Apple to $350 from $335 on expectations that demand for the new phone, which is expected in October, will help propel the company forward following its pandemic-led rout that saw it shutter stores globally.
The 5G-enabled iPhone 12, which is expected to come in a more squared-off frame with more screen space and new features including a LIDAR-enabled camera, is “the light at the end of tunnel” for Apple, and should help propel sales in the final quarter of the year and into 2021.
“We have further confidence that the eye of the storm is in the rear-view mirror for Apple from both a demand and supply chain perspective,” Ives said, adding that he and his team see strong pent-up demand for consumers “currently in the window of an upgrade opportunity.”
“Currently we estimate that (around) 350 million of Apple's 925 million iPhones worldwide are in this upgrade window, as we model going forward in a more draconian scenario that minimal new smartphone activity takes place in the coming quarters,” Ives wrote.
What’s more, Ives also expects that pandemic-related supply chain issues that continue to affect both production and distribution of Apple’s iPhones, iPads, iMacs and MacBook computers and accessories should be straightened out by then.
Ives also noted Apple’s “Teflon-like services business,” which has been “robust despite the Covid storm.” He maintained his outperform rating on the stock.
Shares of Apple were up 0.84% at $317.65 in trading on Tuesday.