Apple Inc. (AAPL – Free Report) has in recent times tried to diversify its business into segments such as subscription as they continue to deal with declining iPhone sales.
The company recently launched iPhone 11 Pro and expectations are conservative because it uses the same design with incremental updates. However, from next year Apple plans to release a remodeled iPhone that is 5g enabled and they are hoping it will boost the demand of iPhones. The phones the company released at the beginning of the month are selling better than anticipated.
JPMorgan analyst revises rating for Apple
On Monday JPMorgan’s Samik Chatterjee reviewed his rating for the company and raised his target price for Apple stock to $265 from $245. This is more than 20% gain from last week’s close and it translates into a market capitalization of around $1.2 trillion. The analysts indicated that the latest handsets are selling well than expected.
As a result, JPMorgan has increased its forecast for iPhone sales by 1 million in Q3 and 3 million in Q4 respectively. According to Chatterjee, the company expects total shipments of iPhones this year to be approximately 187 million. In a note to investors, Chatterjee indicated that they were increasing their phone volume projection as they are optimistic that investor sentiment on the company’s stock will improve.
5G iPhones in 2020
Deployment of 5G is picking momentum and with the sales doing well this year the company expects to build on the momentum next year with a 5G iPhone. The company has taken a conservative approach when it comes to 5G relative to its competitors. This seems like a good strategy to wait for a year since 5G is still undeveloped in the US and is a segment that is still growing.
JPMorgan’s Apple price target has a timeline of December next year which means that the estimates include sales from 5G iPhones. Chatterjee indicated that there will be solid consumer demand for 5G iPhones next year with the company better positioned to capture a huge share of the market with the 2020 products.