Wedbush Raises Apple's Price Target Ahead Of 'Pivotal' March 25 Event

Wedbush's bullish case for Apple Inc. AAPL is getting stronger ahead of the March 25 presentation, which is likely to mark a "pivotal step" for the company.

The Analyst

Wedbush's Daniel Ives maintains an Outperform rating on Apple with a price target lifted from $200 to $215.

The Thesis

Apple is expected to detail how it plans to enter the "content arms race" to help support its services business, Ives said in a research report. Management is likely to include content partners and the company will maintain a 25-35 percent fee of cut of monthly subscriber fees. Apple's original content remains in production with high-profile Hollywood superstars, including Oprah Winfrey, Steven Spielberg, Jennifer Aniston and Reese Witherspoon.

Monday's announcement will likely prove to be the "tip of the iceberg" for a much larger streaming content strategy, Ives said. This may prove to be a large catalyst to Apple's services growth business, which remains a "wild card" in driving the stock's valuation. In fact, Apple's new business could generate revenue of more than $50 billion by fiscal 2020 even though it's years behind in the "content arms race."

Apple's strategy of avoiding large scale M&A deals is widely known but this could change in the streaming video space. The process of creating a large library of original content is a "slow and arduous path," according to Ives, but being aggressive in acquiring content makers creates a realistic goal of hitting 100 million subscribers within three to five years.

Price Action

Shares of Apple were trading higher around $187 Thursday morning.

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