Apple Inc. AAPL is well-positioned for improving results in the back half of 2020 and in 2021 as the 5G cycle powers up, according to Canaccord Genuity.
The Apple Analyst: Michael Walkley maintained a Buy rating on Apple and raised the price target from $310 to $444.
The Apple Thesis: The 5G upgrade cycle is a potential catalyst for Cupertino, Walkley said in a Thursday note. (See his track record here.)
Apple’s earnings are likely to be boosted by a ramp in 5G smartphones in the second half of this year and beyond, the analyst said.
Despite Apple being forced to close retail stores again, iPhone sales improved in the June quarter and are likely to continue improving through the rest of the year, he said. Walkley expects the December quarter to be a strong one, driven by new iPhone 12 models, supporting 5G and other features.
The continued mix shift toward Services make the company’s earnings prospects even brighter, the analyst said. Apple already has an installed base of more than 1.5 billion devices globally and its ecosystem approach, with allied services and adjacent hardware sales, should generate strong revenue, he said.
Apple services enjoy a higher margin, and their revenue growth could outpace total company growth, according to Canaccord Genuity.
AAPL Price Action: Apple shares were down 0.86% at $387.54 at last check Thursday.
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Photo courtesy of Apple.
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