Consumer Electronics

Have Analysts Become Too Positive About Apple's iPhone 12?

Apple Inc. (NASDAQ: AAPL) has gone through a global pandemic, domestic social upheaval and a stock market apocalypse in less than two quarters, and its stock keeps hitting all-time highs. Stocks largely are driven by speculation, and this speculation is guided by analysts. Considering all of the turmoil in this year alone, are analysts overly positive on Apple and even the iPhone 12?

Although the Dow Jones industrial average and S&P 500 are still negative on the year, Apple stock has outperformed with shares up about 24% year to date.

A lot of Apple’s move has been due to the excitement around the upcoming iPhone 12 and 5G. After the huge success that Apple saw last year with the iPhone 11, it makes sense that consumers and analysts alike are clamoring to see what will come with the next generation.

In a recent report from Citigroup, Asiya Merchant suggests that a wave of new purchases of smartphones, personal computers and tablets will be coming over the next 12 months. A survey of 3,000 consumers shows that almost 30% of respondents indicated that they plan on buying a new smartphone over the next year, with almost 25% of iPhone users planning to buy the upcoming 5G iPhone.

Obviously, Apple appears to be a significant winner if this report holds true and 25% of U.S. consumers really do follow through and buy the new iPhone.

Another insight from the Citi report is that brand loyalty for Apple is extreme and that 5G will be an important consideration for the next smartphone purchase. Merchants even noted that iPhone users are willing to pay more for the next smartphone purchase than any other brand.

On the other hand, PC demand likely will see a driving force from consumer demand, while weakness is expected in the commercial side of the business, but this may not translate for Apple. Premium-priced Mac sales may not manifest if these computers are not capable of interfacing with Windows heavy corporate work.

Here’s what some of the other analysts have said about Apple in the past week. Notice how their price targets are only moving in one direction:

  • Wedbush reiterated an Outperform rating and raised its price target to $425 from $375 (6/25).
  • Loop Capital reiterated a Hold rating and raised its price target from $280 to $330 (6/23).
  • Robert Baird reiterated an Outperform rating and raised its price target to $390 from $320 (6/23).
  • Deutsche Bank reiterated a Buy rating and raised its price target from $350 to $380 (6/23).
  • Sanford Bernstein reiterated a Market Perform rating and raised its target to $370 from $285 (6/23).
  • UBS reiterated a Buy rating and raised its price target from $325 to $400 (6/23).
  • Goldman Sachs is the lonely Sell rating on this list, with a $263 price target (6/23).
  • JPMorgan reiterated a Buy rating (6/23).
  • Credit Suisse reiterated a Neutral rating with a $295 price target (6/23).
  • Oppenheimer reiterated a Buy rating with a $320 target price (6/23).
  • Cowen reiterated an Outperform rating and raised its target to $400 from $335 (6/22).

Apple traded early Thursday at $370.39, in a 52-week range of $192.58 to $372.38. The consensus price target is $345.35.