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Piper Sandler raised its Apple price target from $25 to $200, based on its portfolio of hardware and services through 2022.
In a note to investors seen by Appleinsider, Harsh Kumar, chief analyst at Piper Sandler, said investors should view Apple as a “hideout place” in today’s broader tech environment. This is due to current hardware and service dynamics, as well as potential expansion points.
Kumar notes that Apple’s iPhone remains his most important asset. He sees continued momentum for the device through 2022 as 5G networks are built and carrier subsidies drive adoption of iOS devices. The analyst expects Apple to see strong trends in China and India to become a major market over the next few years.
On rumors that Apple would develop a proprietary modem for its iPhones, Kumar said the move could save the company up to $5 billion in operating revenue in the 2023 iPhone cycle.
Kumar expects strong trends ahead in Apple’s services and wearables sectors to offset weakness in the Mac and iPad. Expectations are already muted for the Mac and iPad, and Kumar notes he’s more cautious in 2022 as pandemic-induced growth stabilizes.
Looking ahead, the analyst sees Apple’s potential forays into the automotive and healthcare sectors as the “next major growth markets for the company.” These two areas could be a catalyst that takes the company’s market capitalization to $4 trillion and beyond, he added.
Overall, Kumar says Apple “might be the place to hide in the tech market.”
“With a strong brand, strong free cash flow and margins, revenue/EPS growth and a shareholder return program, we believe
Apple could be the place to be in tech as we navigate the broader market environment,” the analyst wrote.
Kumar’s new $200 12-month Apple price target is based on a 33x price/earnings multiple applied to Piper Sandler’s 2022 Apple earnings estimates. He says the new higher price target multiple reflects the company’s “confidence in the 2022 momentum and the ‘flight to safety’ in the current market environment.”