The following is an excerpt from Emily Barry | Barrons.com |
Apple shares keep going up in anticipation of the iPhone 8 launch later this year, but for the most part Wall Street is already looking at what comes next, after the September iPhone launch.
While UBS analyst Steven Milunovich currently sees limited upside for Apple in the next year -- the stock may rise perhaps 5% from its current $144 -- he sees more potential over the long term. In his view, Apple shares could realistically hit $175 in the next two to three years (a 22% rise). But he says $200 (a 39% jump) is possible if products besides the iPhone really take off.
Here’s what it would take for Apple’s stock price to hit $200 by 2019, according to Milunovich.
• This fall’s iPhone 8 ushers in a “supercycle” of phone upgrades, and investors feel confident that next fall’s lineup will also be strong.
• Apple’s “other hardware” business, consisting of products like the Apple Watch and AirPods, starts seeing “strong growth” of 20% next fiscal year. Right now, investors are primarily focused on quarterly iPhone sales and the potential of Apple’s “services” business. The company would have to show that its wearables have mass appeal and that the overall Apple ecosystem is “more sticky” than investors originally thought.
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