Citi raised Apple’s target price to $300 from $250, reiterating its buy rating and predicting strong results for the holiday season. Analyst Jim Suva cited Apple’s “pricing strategy and recent demand trends” as reasons to predict a “better Christmas shopping season” than last year, when Apple cut its revenue forecast. The consensus, he wrote, was “not fully aware of the demand strength of the Apple Watch and Apple AirPods” and that Apple’s service business would grow and help improve margins.
Suva sees room for gains and sales to rise, but does not expect Apple’s valuation multiples to expand because it “has expanded significantly”.
Apple’s shares have risen 66 per cent so far this year, on track for their biggest annual gain since 2009.
Citi’s revised target price is nearly 15 per cent higher than Apple’s closing price on Wednesday. The stock’s average target price is $260, slightly below its recent close, according to Bloomberg data. Currently, 27 institutions recommend “buying”, 14 rated as holding stake and 7 recommended selling.
Apple will report its first – quarterly results on January 28.