BofA Raises Apple Price Target For Second Time In 5 Weeks

Apple Inc. AAPL investors have had another big year in a difficult environment in 2020, but one Wall Street analyst said Wednesday that things could get even better for Apple in the second half of the year.

The Apple Analyst: Bank of America analyst Wamsi Mohan reiterated his Buy rating for Apple and raised his price target from $390 to $410.

The Apple ThesisMohan, who previously raised his price target from $340 to $390 in early June, said Wednesday that Apple has too many traits of a good investment to ignore.

The company has arguably the world’s best balance sheet that provides safety in an uncertain environment. It's a tech story stock with an imminent catalyst in 5G iPhones. It's a large-cap tech stock with relatively low regulatory risk. It benefits from passive inflows and provides investors an alternative source of dividend income while interest rates remain essentially at 0%.

At the same time, Mohan said Apple has extremely impressive business fundamentals as well. App store revenue growth has been robust, iPhone channel inventory is falling, iPhone demand has been resilient, and Apple’s brand remains extremely strong among its customers.

“While near term data points are getting more constructive, we also think positioning has a significant role in the near term price action,” Mohan wrote in a note.

Bank of America said third-party developer data suggests App Store revenue grew roughly 30% in the fiscal third quarter. Mohan is expecting 20% Apple Services revenue growth in the third quarter and 18% growth for the full fiscal year. He is also projecting 17% Services revenue growth in fiscal 2021 and 15% growth in 2022.

Benzinga’s Take: With the stock up another 34.3% in 2020 and Apple’s market cap at roughly $1.7 trillion, it may seem as if additional upside is limited. Given Apple’s fundamentals and valuation remain relatively attractive, there’s no obvious reason the stock won’t continue to make new highs in the second half of the year.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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