Apple Stock Gets Upgrade on Potential AR / VR Headsets

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Apple Store Fifth Ave in New York City when the iPhone 13 launched in September.

Spencer Platt / Getty Images


Apple

received new love from Wall Street as analysts continue to raise their expectations for the stock to take into account the potential of the company’s so far unanticipated entry into the augmented and virtual reality hardware market .

As stated in the most recent Barron In the Tech Trader column, analysts began revising their target prices and earnings models for Apple stocks (ticker: AAPL) to reflect the expected debut of the company’s AR / VR headset or goggles, or whatever. be the product that turns out to be, about a year from now. JP Morgan analyst Samik Chatterjee raised his target price to $ 210 from $ 180 on Monday. This compares to the stock price of just over $ 174 on Tuesday morning.

Chatterjee has said Apple is their top choice for 2022, joining Wedbush analyst Dan Ives, who recently said the same. Evercore ISI analyst Amit Daryanani said on Tuesday that stocks were among his favorite picks for 2022.

BofA Global Research analyst Wamsi Mohan upgraded his rating on Apple stocks to Buy from Neutral, while raising his target on the stock to $ 210 from $ 160. He cited the expected arrival of an AR / VR headset during the call.

“We view this technology as a game changer because it will enable many new applications that will require high performance hardware and higher access speeds,” he wrote in a Tuesday research note.

While some analysts are concerned that AR / VR glasses could eventually replace the iPhone as the primary connectivity device, Mohan said he believes iPhone sales in FY 2023 will be better than some. don’t think so. Augmented reality could become the “killer app” for 5G devices, while the AR / VR category offers new opportunities for Apple’s service business, he said.

Mohan believes Apple will continue to aggressively return capital to holders, and also noted that many institutional investors remain underweight Apple relative to the


S&P 500.

They could strengthen their positions ahead of the AR / VR launch next year, he said.

Daryanani, the Evercore ISI analyst who named Apple as the top pick for 2022, repeated its outperformance rating and raised its target price on the stock to $ 200, from $ 180. In a research note, Daryanani said he believes Apple can sustain growth in earnings per share through mid-teens, “driven by a host of age-old levers,” particularly the growth of wearable devices and laptops. services. He said Apple’s services arm could reach $ 100 billion in revenue by fiscal 2025, and he envisioned a path for wearable devices to become a $ 75 billion business.

Daryanani’s other top picks for next year include the connector company


Amphenol

(APH), networking companies


Arista Networks

(A NET),


Cisco

Systems (CSCO) and


Ciena

(CIEN), and the IT service provider


CDW

(CDW).

After a recent surge of nearly 20% that brought the company’s market capitalization to nearly $ 3 trillion, a milestone no other state-owned company has ever reached, Apple stocks have succumbed to a modest profit taking. As of Tuesday morning, the stock was down 0.7%, a day when the


Nasdaq composite

was down 1.2%. At $ 174.38, the stock is less than 5% of the $ 3 trillion mark.

Write to Eric J. Savitz at eric.savitz@barrons.com


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