The iPhone 11 is selling well, with some of its models under-supplied and Apple’s share price rising on the back of good news. A few days ago, Apple’s share price hit another record high, valuing the company at $1.2 trillion. On November 19, Apple’s share shigh hit a peak of $268.00, then fell to close at $261.78 on November 22. Will Apple’s share price continue to rise or fall for some time to come? That’s a good question.
On December 12, 1980, Apple went public, at a price of $22. Apple later split four shares, three 1 shares into 2 shares, and one share split into 7 shares on one occasion. If you buy 1 share when Apple goes public, you now own 56 shares. It was $22 at the time and now it’s about $15,000.
Now that Apple’s share price is already so high, what will happen in the next period? On this issue, let’s hear the views of all parties:
What the analyst sat.
Credit Suisse analysts said in a report that the iPhone 11 has been in sales for two months, and the data suggest that sales are significantly better this year than last year, and that while 90 percent of models are scheduled to wait less than a week later, the out-of-stock is still there. The supply balance was reached 3 weeks after the introduction of the new machine. Sales in China grew 6% year-on-year in September and October.
Why is this so? Analyst Matthew Cabral said the aggressive pricing of some of the iPhone 11 models compared with the previous AVERAGE price of the new aircraft was fuelled by sales growth.
Despite the good sales trends, Cabral remains cautious about Apple stock, setting a target price of $221, below the current price.
Apple’s service industry is growing rapidly, and the price-to-earnings ratio will rise further in the future. Cabral points out that in 2020, Apple’s price-to-earnings ratio could reach 20 times, with an average price-to-earnings ratio of 13 times over the past five years and 17 times the highest price-to-earnings ratio since 2020.
– Morgan Stanley
Katy Huberty, an analyst at Morgan Stanley, says Apple’s top investors do not own a high proportion of the stock. Morgan Stanley has set a target price of $296 for Apple shares, with 10.4 percent of the way up from an all-time high.
That’s why Huberty said, “We think there’s still room for Apple stocks to rise.” “Why is it rising?” There are many reasons, such as strong demand for iPhones, growth in the service sector, and quarterly share buybacks.
Trade relations between the U.S. and China have affected Apple’s performance, and its profit margins have remained flat since the tariff change in September, without rising.
Apple’s market capitalisation is once again overtaking Microsoft as the world’s market cap. Wedbush analyst Dan Ives believes Apple’s stock still has room to rise despite hitting new highs, and he has set apple target price at $325. FactSet looked at the pricing of 43 analysts, with Dan Ives giving the highest target price.
“Apple’s share price has risen 65 percent so far this year, and we believe Apple is still in the middle of the iPhone growth and will continue to grow in 2020; “
The combination of the iPhone 11 and 5G will create a “superloop” for Apple, and the service sector will be key to growth over the next 12-18 months, with annual revenue of $60 billion.
– J.P. Morgan
J.P. Morgan analyst Samik Chatterjee, who has raised Apple’s target price to $290 from $280, said investors ignored the potential of Apple’s advertising business and saw only the service sector’s revenue growing.
“Which business in Apple’s services sector will be the next growth point?” the report said. Investors are trying to distinguish. We believe that there is a business at Apple’s fingertips that is hidden, that it is underestimated, that it is advertising, that advertising revenue is shifting to mobile platforms, that iPhone users are close to 1 billion, and that Apple’s advertising expansion plans have gone well so far. “
– Wearable devices
Apple’s wearables business is growing fast. In the quarter ended September 28, Cook said revenue from its wearable spree, which includes AirPods, Apple Watch, Beats products, hit a record high, growing by more than 50 percent. This growth trend will continue and will turn into a $60 billion-a-year business. Analysts at Evercore ISI believe that Apple’s wearables business will grow at a cagrtime rate of more than 20 percent over the next few years, and that Apple will continue to grow even if the iPhone business remains stable.
The number of iPhone users has reached 1 billion, but less than 10 percent of those users own AirPods. There are approximately 75 million Apple Watch users worldwide and approximately 50 million AirPods users worldwide. It’s not hard to see how much growth there is still for Apple’s wearables.
– iPhone Hyperloop
Although iPhone sales have fallen, many people have not given up hope. This year’s iPhone 11 is doing well, and with the arrival of the 5G, the iPhone is likely to see another sales peak.
In fact, iPhone sales peaked in 2015, with about 231 million units sold in 2018, after which Apple stopped publishing sales figures, but JPMorgan estimates that iPhone sales could be as low as 185 million units in the 2019 calendar year.
While the iPhone 11 is selling well, it’s mainly the lower-priced base models that sell well, and if Apple is to really reverse the trend, it’s going to look like 2020. Taiwan’s Electronic Times reported that Apple’s 5G phones are expected to sell more than 100 million units by 2020, and for the iPhone 11, Apple expects to sell 70-80 million units this year. J.P. Morgan believes Apple’s iPhone will sell 198 million units in the calendar year 2020, lower than in 2015, but better this year.
5G is worth looking forward to, but it’s a big variable, because exactly how many people are willing to buy are not yet known.
– Service revenue
Apple has launched new products and services such as Apple Card, Apple TV Plus, and in fiscal 2019, Apple’s total service revenue has exceeded $46 billion, the size of the Fortune 500’s 70th-ranked company.
Analysts generally agree that growth in the services sector is a big plus because of higher profit margins. “Apple has launched a new range of services, led by Apple TV Plus, as well as smaller Apple Arcade and Apple Card, and is expected to accelerate further in the 2020 and 2021 fiscal years,” Morgan Stanley said in a statement. “
Despite this, Apple’s total revenue in fiscal 2018 was approximately $266 billion, down to $260 billion in fiscal 2019.
Mr. Market is moody, and no matter what analysts predict, investment still needs to be cautious, no matter how well the growth is. Apple’s revenue fell 2 percent and profit fell 7 percent in the fiscal year ended Sept. iPhone revenue accounted for 55 percent of Apple’s total revenue, but fell 14 percent in the previous fiscal year.
It’s not the iPhone that really makes Apple’s share price go up, it’s the wearables and services, which already account for 30 percent of Apple’s revenue. Despite this, iPhone revenue fell by $22.5 billion last fiscal year, and revenue from wearables and services grew by $13.6 billion.
So it makes sense for some to think that Apple’s current share price is overvalued.
Yes, how do you see it?