AAPL target price is up a bit and analyst estimates have been revised upwards. Both Nomura and Morgan Stanley have raised their AAPL target price, and Woodring has predicted a $19.7 billion revenue in the Apple Services sector.
Analysts' projections of Apple's future price
During the last decade, Apple's stock price has grown significantly. While analysts have been impressed with the company's high prices, they have also been worried about the company's financial health. The company has performed well over the years, but more interest rate hikes could hinder the company's revenue. Apple's business model is resilient, however, and it should be able to weather the storm. However, if the economy begins to slow down, the stock price might go down.
Analysts are expected to publish a variety of price targets. These targets can be assigned to any kind of security, including stocks, bonds, and complex investment products. The target price is calculated by averaging the projections of the analysts who produce research reports. Some analysts also use algorithm-based predictions. These are based on technical analysis and fundamental data.
Analysts' projections of Apple's future price are a great way to get a sense of what the company might do in the future. In particular, analysts try to determine what the company's intrinsic value is. Some analysts predict that Apple's stock could be worth over $500 by the start of the next decade. However, these predictions may not come to fruition.
For instance, the average analyst's projection for AAPL's EPS in 2023 estimates a $6.26. However, the highest AAPL EPS forecast of $7.10 is a bit over the top. In fact, the AAPL's EPS is expected to grow at less than 10% over the next few years. The best Apple price predictions come from analysts who use sophisticated techniques to assess the company's financial performance and future prospects. These analysts also evaluate the company's options contracts, allowing them to determine whether the stock is undervalued or overvalued. The company also has a loyal fan base, which should help the stock perform well in the future.
Apple's business model is also expected to benefit from increased demand for the company's services. Analysts predict that Apple will deliver more value to consumers in the coming years. The company is also expected to continue to expand its AirPods line of wireless headphones. Apple also has exciting projects in the works, including an autonomous vehicle. This new product is expected to come out in 2025, which could be a promising catalyst for revenue growth.
While analysts' projections of Apple's future price have not yet been revealed, most analysts believe that Apple will be worth a lot more than $7 by the beginning of the next decade. The company's current market cap is $2.7 trillion. This makes it one of the world's largest companies. In the coming years, the company will be investing heavily in its AirPods line and its newest products, such as the M1 Mac processor. Apple's stock could be a good buy when the price falls below $150 per share.
Woodring predicts revenue of $19.7 billion for Apple Services
During Apple's just-ended fourth quarter, the company reported a 12% increase in its Services segment. Apple's Services segment includes Apple Music, Apple Arcade, the App Store, Apple Pay, and iCloud storage. This unit also includes AppleCare and Apple TV+. Apple's Services segment is a profitable unit because it can bring in recurring revenue.
Analyst Eric Woodring at Morgan Stanley predicts $19.7 billion in Apple Services revenue for the December quarter. This would be 4% higher than analysts' consensus forecast of $19 billion. He also predicts that Apple's iPad revenue will remain flat, but he predicts that the average sale price will be $838. He believes that higher ASPs will help Apple shift its mix towards higher-end models.
The Services segment also includes Apple TV+ and Apple Pay. The App Store makes up 60% of the Services segment. Apple has 825 million paying subscribers worldwide. Apple also sells ads alongside app store search results. In addition to the App Store, Apple's services business includes Apple Music, Apple Arcade, iCloud storage, and AppleCare.
Apple reported iPhone sales of 51.1 million units, which was slightly below analysts' expectations of 51.5 million units. The company also slightly missed its accessory and accessories targets. Apple also reported that the supply of Apple Watch Ultra is still constrained. Apple Watch Ultra sales grew by nearly 60%, and the company also said that it has a backlog of Mac demand. However, due to parts shortages, Apple could not meet Mac demand in the quarter.
Morgan Stanley believes that Apple will beat Wall Street's expectations for the September quarter. The analyst predicted that iPad revenue will remain flat, and predicted that Apple will sell 51.1 million iPhones. The company's average sale price will be $838, and this may lead to $43 billion in iPhone revenue. He also expects that a larger catalog of sports entertainment programming will help boost sign-ups. Apple also reported that revenue increased in all regions except Japan. The company said that the services segment was impacted by the economic crisis. However, the company grew revenues in India, Indonesia, and Vietnam. The company also reported a 12% increase in its Services income, which includes AppleCare. The Services segment earned $19.2 billion during the quarter, compared to $19.6 billion in the prior quarter. Apple has a loyal customer base that has been resistant to churn. The company's services unit is expected to grow by 12% in the coming fiscal year, and Woodring believes that factors in the December quarter will accelerate year-over-year growth.
Apple's services business has been a growth engine for the company. However, some Wall Street analysts are concerned about the slowdown in services. They note that the App Store's revenue fell by 5% in September. This is due to a 14 percent decline in the gaming sector.
Morgan Stanley and Nomura raise AAPL target price
Earlier today, Morgan Stanley and Nomura raised their price targets for Apple (AAPL) stock. The two firms both predicted that Apple's new products will outperform its hardware rivals. The Nomura analysts argued that Apple's current price-to-earnings ratio of 21 is misguided because the iPhone replacement cycle is longer than it should be. Likewise, Morgan Stanley argued that the nascent autonomous driving division could provide upside.
Nomura analysts also raised their expectations for the iPhone 12 model. The firm predicted 75-85 million iPhone 12 units will be shipped in the second half of 2020. However, they warned against inflated expectations for iPhone 12. The analyst team also noted that upgrade rates declined during the 3G to 4G product cycle. The Nomura analysts also pointed out that the 5G supercycle isn't as exciting as it seems. The analyst team says the current iPhone replacement cycle has stretched to nearly four years. They also noted that new products aren't baked into the share price as they were when Apple was under Steve Jobs.
The analysts from Morgan Stanley and Nomura have a lot to say today, but their new targets are the big hits. The firm raised its target price by $72 to $368, and its implied P/E target increased to 22.2 from 19.1. The analyst noted that Apple's dependence on the iPhone has decreased and its balance sheet is better than it's been in a long time. They also said that the company's profitability is now better than it's been.
Both analysts also highlighted the importance of new products, especially in the smartphone and tablet industries. They said that 6% of Apple's revenue over the past five years has been generated by new products, compared to 3% in the previous five years. The firm's analysts also noted the upside potential of Apple's augmented reality (AR) products and its planned launch of a suite of augmented reality services.
Both firms also raised their predictions for Apple's gross margins. The firm predicts that gross margins will be 43.1% in 2022, a big jump from the 30% it had predicted in 2018. However, logistics and component costs could dent the margins in the nearterm. In addition, Apple's suppliers in China are experiencing a slowdown. Analysts at Nomura also raised their price targets for the iPhone 12. Nomura's analysts believe that the new iPhone X will have a much higher price than the iPhone 8, but they still expect the phone to be worth the extra money. However, the analysts also cautioned against inflated expectations for the iPhone 12.
The analysts at Morgan Stanley and Nomura believe that the new iPhone will outperform its hardware competitors. In fact, the firm's analysts believe that Apple stock will outperform its hardware rivals in the coming 5G product cycle. They also noted the importance of new products and services, such as Apple Watch, augmented reality (AR) products, and autonomous driving.