Apple shares are up more than 80% this year: the start of the year was the best performance in a decade


Apple shares are up more than 80% this year: the start of the year was the best performance in a decade

Apple’s shares rose 1.6 percent in the first trading day after the Christmas break. Apple products, particularly AirPods and iPhones, have been listed as “essentials” by a large number of customers, setting a positive tone for the market, according to Evercore ISI, a market research firm.

As of Thursday, Apple had closed down only five times in 18 trading days this month. Apple’s shares rose more than 7 per cent in December from the previous month and are on track for their 10th gain in 2019.

Apple shares are up more than 80% this year: the start of the year was the best performance in a decade

The rally, the largest U.S. public company, has helped the stock gain more than 80 percent this year, adding about $530 billion to its market value. That’s more than double Intel’s market capitalisation for all but five companies in the Standard and Poor’s 500-stock index.

About a decade ago, Apple’s share price soared nearly 150 per cent throughout 2009 as the stock market began to recover from the financial crisis. The company’s 2019 rally easily outstripped the nearly 30 per cent gain in the Standard and Poor’s 500-stock index and the gains of other big stocks. Microsoft is up more than 55 percent so far this year, while Amazon is up about 23 percent, less than a third of Apple’s.

Apple’s share price has been volatile this year. On January 2nd Apple cut its revenue forecast for the first time in nearly 20 years after it issued a clear negative message. The news triggered a massive sell-off, but the share price quickly rebounded and continued to rise throughout the year. There are signs that trade tensions are easing, providing a stable macroeconomic boost to the stock market.

Krish Sankar, an analyst at Cowen, said in a December 17 report that Apple “issued a surprisingly negative forecast at the start of the year, followed by a slowdown in iPhone sales, a lack of a clear 5G strategy and trade tensions.” It exacerbated the bearish mood towards the stock in the first half of the year. But in the second half, that sentiment became positive.”

Apple shares are up more than 80% this year: the start of the year was the best performance in a decade

Mr. Sankar attributed the shift in sentiment to the growth of Apple’s service business, which has been the focus of analysts’ attention by launching streaming video products and subscription-based video game services. What’s more, Wall Street expects Apple to launch its 5G iPhone by 2020 and is optimistic about its potential.

Several companies have recently raised their target share prices, and Apple’s next-generation products are widely seen as one of the most important drivers.

In addition to Mr Cowen raising Apple’s target to $325 from $290 earlier this month, Piper Jaffray raised his target by $15 last week. In addition, Mr. Wade bush raised Apple’s target price to $350, predicting that the next generation of iPhones will be faster and more powerful than the iPhone 11, which is also doing better than many expected. In 2019, iPhone sales accounted for about 55 percent of Apple’s total revenue.

The average target price for Apple shares is about $268, which means it is about 7% below current trading levels. Still, Wall Street is generally bullish on Apple’s stock, with 28 companies advising investors to “buy” the stock. By contrast, 14 companies rated “neutral” and only seven claimed to be “sold”.

The impending test of Apple’s share price will come in late January, when it is expected to report its first-quarter results for fiscal 2020. Analysts expect earnings to grow more than 8 per cent and revenue to grow 4.5 per cent. Bloomberg MODL estimates that iPhone sales are expected to be about 66.7 million units in the quarter, up about 0.8 percent from a year earlier. The average price of an Apple phone is expected to be $781.35, down 4.1 percent from a year earlier. (Small)

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