Apple Could Rise 20% Over The Next Year

Shares of Apple Inc. AAPL are already higher by more than 40 percent over the past year and nearly 20 percent in 2017. Investors looking to take some of their profits of the table under the assumption that the bull run has come to an end may need to reconsider, at least according to BTIG's Walter Piecyk.

Piecyk reaffirmed a Buy rating on Apple's stock but boosted his price target to $165 from $135 based on his 2018 financial estimates, which now take into account a return to revenue growth and a strong anticipation for the upcoming iPhone that's rumored to have a curved screen. Moreover, the revised estimate also includes strong expectations from new product categories and services.

Piecyk expects Apple's 2017 revenue to total $226 billion ($8 billion higher than previous estimates) and expects the company's revenue to grow to $241 billion in fiscal 2018. This implies a 4.9 percent revenue growth in 2017 and a 6.6 percent growth in the following year.

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The revised 2017 revenue estimate was accompanied with an $0.18 per share boost to the analyst's estimate, which now stands at $8.72. Earnings per share is expected to grow to $9.72 per share in fiscal 2018 which implies an 11.4 percent growth and also takes into account $10 billion worth of share repurchases per quarter.

Of particular note, the analyst's estimates actually fall below the consensus estimate. For example, the gap between the analyst's 2018 revenue estimate and the Street's is just $4 billion and it "doesn't take much to make up the gap."

Finally, the analyst explained his new price target is based on a 17.0x multiple on the 2018 earnings per share estimate of $9.72 and also implies a 16.5x multiple on his calendar 2018 earnings per share estimate.