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Canaccord Raises Apple Price Target Ahead Of iPhone Event

September 4, 2018 10:46 am
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Apple, Inc. (NASDAQ:AAPL) investors know September is a big month for the company. And one Wall Street analyst is even more optimistic about the stock headed into this year’s iPhone event.

The Analyst

Canaccord Genuity analyst T Michael Walkley reiterated his Buy rating and raised his price target from $220 to $250.

The Thesis

Walkley's latest checks on iPhone sales reveal the post-iPhone X market is stronger than anticipated. He said iPhone users continue to express high levels of satisfaction, and he predicts Apple will be able to grow its market share of the global premium smartphone market.

“Further, we believe Apple’s ecosystem will contribute to strong ongoing growth for services revenue, and we expect the higher margin services revenue growth to continue outpacing total company growth,” Walkley said in a note.

Many, including Walkley, expect Apple to unveil three new iPhone models at its Sept. 12 event. He estimates the global iPhone user base will eclipse 700 million in 2018 and will continue to drive iPhone upgrade sales and services revenue. Walkley estimates services revenue can grow in the double digits in the long-term, including 25 to 30 percent growth from the App Store. In addition, he said new revenue growth sources, such as streaming video, could help drive margin upside.

Canaccord Genuity raised its 2018 and 2019 EPS estimates from $11.71 and $13.59 to $11.77 and $13.61. The firm also initiated a fiscal 2020 EPS estimate of $15.30.

Price Action

Apple's stock traded around $227.83 Tuesday morning.

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