One Wall Street analyst says Apple will surge 10% from current levels as the new iPhone 12 keeps growth afloat
- Apple is set to surge 10% to $350 as the iPhone 12 helps reinvigorate growth going into 2021, according to a note from Wedbush published on Tuesday.
- Apple's "Teflon-like" Services business is "on track" to hit $60 billion in annual revenue next year, has held up well amid the coronavirus pandemic, and is worth between $500 billion to $600 billion, according to Wedbush.
- Wedbush thinks Apple has exited the "eye" of the "COVID-19 storm" from both a demand and supply chain perspective.
- Visit Business Insider's homepage for more stories
Apple is poised to surge 10% from current levels to $350 per share as the iPhone 12 represents the road to recovery for the company and will help reinvigorate growth going into 2021, according to a Wedbush analyst note published Tuesday.
Wedbush recommended investors take advantage of the near-term uncertainty and buy the stock "for the other side of this dark valley," as it raised its price target $15 from $335.
Wedbush is impressed by Apple's "Teflon-like" services business, which has posted robust growth despite the coronavirus pandemic.
The subscription-based unit, which includes Apple TV+, Apple Music, Arcade, and more, is expected to hit $60 billion in annual revenue in 2021 and is worth between $500 billion and $600 billion, Wedbush says.
Meanwhile, the iPhone 12 should represent the next chapter of growth for Apple, even if it isn't released this fall and is delayed to November or December, which Wedbush thinks is a likely scenario.
Wedbush expects Apple to release four different iPhone 12 models with a mix of 4G/5G capabilities and different sizes.
Wedbush thinks demand for Apple's iPhone should begin to normalize and estimates approximately 350 million of its 925 million iPhone install base is due for an upgrade over the next 18 to 24 months.
Additionally, Apple's supply chain seems to be recovering from the rolling shutdowns that hit factories in Asia earlier this year due to the virus, and according to Wedbush's supply chain contacts, Apple is on pace to sell 165 million to 185 million iPhone units in 2020, with momentum heating up into early 2021 as the iPhone 12 is launched.
Apple is estimated to have sold 185 million iPhone units in 2019, according to Wedbush.
Shares of Apple traded up more than 1% to $318.85 in Tuesday morning trades.
Apple is on track for seven straight days of gains if it closes higher today. Shares of Apple are up more than 8% year-to-date.
Read the original article on Business Insider