In a note the analyst affirmed a buy rating on the Cupertino, Calif., tech giant and lifted his price target 29% to $355 from $275.
The new target indicates 14% potential upside from the stock’s Tuesday closing price. At last check, the shares were up 0.5% at $314.20.
“[Apple’s] ecosystem approach, including an installed base that exceeds 1.4 billion devices globally, is leading to record services revenue, and we expect the higher-margin service revenue growth to continue outpacing total company growth,” Walkley wrote.
In services, “the pricing of Apple TV+, which is at the low end among competing services, could prove compelling especially given the recent exclusivity deal with former HBO CEO Richard Plepler,” the analyst wrote. Initial feedback for the services and games in Apple Arcade “is strong,” and the App Store “continues to post strong results.”
These combined with Apple News+, Apple Card and Apple TV channels should help services momentum “continue toward 500 million subscribers,” the analyst wrote.
The firm predicts Apple will maintain its market-share leadership in the premium-tier smartphone space and could be bolstered by the switch to 5G.
“Consistent with our survey work, we believe sales for this year’s iPhone 11 lineup remained strong through the December quarter, including in China, and ... the potential launch of a low-cost iPhone combined with a 5G upgrade cycle will drive further demand through 2021," Walkley wrote.
As a result, the firm raised its overall iPhone revenue estimates for calendar 2019 through 2021 to $141 billion, $152 billion and $159 billion from its previous view of $139 billion, $143 billion and $147 billion.
Meanwhile, it's got "market-share-leading positions" in wearables with the Apple Watch and AirPods, both with "strong sales and growth momentum," the analyst wrote.
Apple is a key holding in Jim Cramer’s Action Alerts PLUS charitable trust.