Since bottoming out at $152 in early 2019, shares have more than doubled.
The best part – the stock could easily hit $400 a share this year after posting blowout earnings. EPS of $4.99 beat estimates for $4.55. Revenue of $91.8 billion was well above estimates for $88.5 billion. iPhone revenue soared to $55.96 billion, which was above estimates for $51.62 billion. Gross margins rocketed to 34.8%, as compared to estimates for 38.1%.
Of course, analysts loved it.
“We would characterize these results and guidance as a ‘blow out’ print that will put more high-octane fuel in the bull thesis looking ahead,” Dan Ives, analyst at Wedbush, as quoted by MarketWatch, adding that the biggest positive was strong March guidance “on the heels of pent-up demand within the installed base which is now over 1.5 billion devices worldwide.”
Ives has a $400 price target on the AAPL stock, believing folks are undervaluing 5G.
Granted, some analysts, such as Wells Fargo’s Aaron Rakers remain skeptical of higher highs, there are still plenty of upside catalysts remaining here. For one, the 5G boom has yet to be priced into the stock. Apple is expected to release its first 5G phones this year. Once that happens, Apple users are likely to upgrade.
Better, analysts like Bank of America’s Wamsi Wohan – who reiterated his buy rating and raised the price target to $330 – believes Apple’s wearable device portfolio can push the stock higher, too. What’s more is Apple now has $207.06 billion in cash, which it could use to double its dividend and buyback more AAPL stock.
Some also argue the stock may still be cheap at current prices.
“If the business trends continue, one could argue that the equity, even though trading at a historically high price-to-earnings ratio, is still cheap, with more room to rise in the future. The company’s strong results will force sell-side analysts to take up their earnings and revenue estimates for both 2020 and 2021. Which is likely to help pull that price-to-earnings multiple lower and drive the stock price higher,” notes Forbes.
In short, Apple could see higher highs near-term with plenty of big catalysts ahead.
