Apple on course to hit a $2 trillion valuation
The tech giant has seen its share price rebound after tumbling 25% the Covid-19 outbreak, with the stock on course to exceed analysts price targets for 2020 and on a path to be the first company to hit a $2 trillion valuation.
Two years ago, Apple became the first company to reach a $1 trillion market valuation. This week, several analysts have begun eyeing the next milestone, with the company on course to break above $2 trillion.
In a note to investors earlier this week, Evercore ISI analyst Amit Daryanani expressed his optimism for Apple stock and provided a blueprint for how the company could drive its share price higher and reach its next landmark valuation.
In terms of timeline, the Evercore analyst believes the stock can reach a $2 trillion market cap over the course of the next four years, implying a 13% - 17% annual appreciation in share price.
Daryanani’s outlook is based on the company’s core business growing year-on-year, with the analyst predicting that Apple could see its earnings per share (EPS) hitting $23 by September 2024 – almost double his EPS estimate of $12.72 for this year.
Apple opened at $323.34 per share on Wednesday.
Evercore lifts target price for Apple stock
Due to the investment bank’s upbeat outlook, Evercore reiterated its ‘outperform’ rating for the stock and lifted its target price for Apple from $345 to $360 per share, implying a potential upside of 11%.
‘Apple continues to offer the best risk/reward in large-cap tech and long-term investors should use any weakness to add to positions,’ Daryanani said in the note.
Apple is already closing in on analysts’ median price target of $323.79 per share, with the stock on course to break above that level this week.
Double-digit growth expected from Apple services and wearables
Evercore is particularly excited about the growth prospects of Apple’s services and wearables division, with the investment bank forecasting double-digit growth for both units.
Daryanani said that sales from the company’s wearable technology, such as its Apple Watch and AirPod Pro headphones, could generate revenues of over $60 billion in the years ahead, with its services division capable of generating $100 billion in sales over the period.
The analyst also had good news for shareholders, with him predicting that Apple will continue to buyback shares to reduce its share count by around 1 billion over the next four years, which would also help it in achieving its $2 trillion valuation.
How much does it cost to buy US shares with IG?
There are three ways to ‘buy’ US shares with IG: spread betting, trading CFDs or buying physical shares. How much it costs will depend on which method you choose. The table below illustrates how the costs to get exposure to $12,750 of Tesla stock, which is equivalent to 17 shares (quoted at $750 a share, at a GBP/USD rate of 1.305).
Remember, spread bets and CFDs are derivatives, which come with higher risk and reward than investing.
Cost to get exposure to Tesla stock
|Spread betting||CFD trading||Share dealing|
|Action||Buy $0.13 per point||Buy 17 share CFDs||Buy 17 shares|
|Capital required to open||$2000||$2550||$12,750|
Note: The above is accurate as of 10 March 2020, and amounts do not include overnight funding charges and taxes.
Spread bets are not subject to tax. CFDs are free from stamp duty, but subject to capital gains tax. Share dealing is subject to both stamp duty and capital gains tax.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.