Apple’s Market Cap Nearing $2.5 Trillion as Analysts Turn Bullish on Earnings

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In Los Angeles, there is an Apple store.

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Apple

Following a rush of bullish notes from Wall Street ahead of the company’s June-quarter financial reports, expected two weeks from now—along with increased hopes for the fall introduction of new iPhones—shares have risen to record highs, boosting the company’s worth to about $2.5 trillion. J.P. Morgan analyst Samik Chatterjee reiterated his Overweight rating on Apple (ticker: AAPL) on Wednesday, raising his price target to $175 from $170 and placing the stock to the firm’s “analyst focus list.” Chatterjee believes the Street’s forecasts for the impending iPhone 13 cycle are too low, citing upward revisions to iPhone 12 build estimates and sustained growth in Mac sales.

“A road to Apple surpassing investor expectations over a longer time frame rather than just the impending earnings print,” the analyst says. According to Bloomberg, Apple has requested suppliers to produce up to 90 million iPhone 13 units, up from 75 million units in prior initial orders for new iPhone generations, indicating that the company expects significant demand for its second generation of 5G compatible phones.

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Meanwhile, Citigroup analyst Jim Suva reiterates his Buy rating on Apple stock with a $170 price target, while raising his profit forecasts for the current quarter, the following quarter, and fiscal years 2022 and 2023. He believes that the Street’s consensus projections are far too low. According to Suva, his checks reveal sustained strong end-market demand for Macs, iPhones, and wearables, particularly the Apple Watch and the new AirTags. Suva writes, “Our independent analysis shows that many iPhone customers are purchasing Apple’s recently introduced AirTags in 4-packs for $99 vs single purchases for $29.” “Most importantly, many people are using key rings and loops. As a result of the drive for fashion and beauty above function, many people are spending more on accessories than on AirTags without realizing it. We also notice that accessories have even greater margins, and Apple’s world-class marketing is resulting in a network effort of customers voluntarily advertising to other users, resulting in a virtuous cycle that is only getting started. All of this is made possible by Apple’s amazing integrated user experience and privacy platform.” While Apple’s stock has underperformed the market this year, Suva believes the stock will outperform ahead of the September debut of new iPhones. In recent trade, Apple shares rose 2.5 percent to $149.33, bringing the company’s market capitalization to $2.492 trillion. The stock has gained 13% so far this year. Eric J. Savitz can be reached at eric.savitz@barrons.com./nRead More