Apple’s current share price does not reflect the tech giant’s burgeoning ambitions for autonomous vehicles, according to a team of UBS stock analysts led by David Vogt.
Analysts have a price target of $ 142 for Apple, a gain of around 12% from current levels. In a recent memo, analysts said their price target reflects Apple’s self-driving vehicle desirability.
Apple has been developing autonomous vehicle technology for years, but has never confirmed that it works in a car. In a recent interview, CEO Tim Cook hinted that Apple was working on an electric vehicle project – but said many of Apple’s ideas “never see the light of day.”
But UBS noted that there are more and more signs that Apple is working on autonomous vehicle technology. For example, Apple recently obtained a patent for VoxelNet, a technology that could be used for AVs, analysts said.
“Although Apple has not yet made an official announcement, we believe the series of patents granted around VA further demonstrate that Apple is allocating significant resources to projects that have an ‘option’ but which are not reflected in the actions, ”they said.
UBS also noted that Apple’s Voxel patent brief briefly mentions that the technology involves processors that simulate a vehicle making a turn, further indication that the company is diving into self-driving cars.
“Although the application can have a myriad of uses, we find that the use of the word ‘vehicle’ in the patent claim as well as previous research published by Apple is important clue to the company’s business intentions.” , UBS said.
Apple rose 1.6% on Thursday, although the stock is down about 2.5% year-to-date as investors took profits on mega-cap tech names that dominated in 2020 .
“Apple is currently trading at 28x NTM P / E, in line with its one-year average,” UBS said. “However, we believe that a SOTP (SOTP) framework is more appropriate in the future given the optional nature of the automobile. As such, our price target of $ 142 not only reflects value for the” Apple’s “Core of ~ $ 128, but also a uniformly weighted probability value of Apple’s auto opportunity ($ 14 / share) in our SOTP analysis.”