JPMorgan initiates Apple coverage at $272

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From a note to clients by Samik Chatterjee that landed on my desktop Thursday:

 

We are initiating on Apple (AAPL) with an Overweight rating and December 2019 price target of $272, implying +23% upside from current levels. While Apple’s leadership position in the premium smartphone market is well understood by investors, we still see considerable upside to the stock from current levels led by a combination of:

  1. faster-than-expected transformation to a services business
  2. stronger-than-expected price increases in the core iPhone business
  3. underappreciated position for continued robust growth in the installed base
  4. continuous innovation disrupting new end-markets;
  5. boost to earnings growth from a normal course of share repurchases
  6. optionality available from the use of a strong balance sheet for either outsized share repurchases or M&A.

Initiates Overweight rating and $172 price target. 

This is a big note, illustrated with 32 tables and 155 charts. A sample (click to enlarge):

j.p. morgan

j.p. morgan

My take: A new, bullish stance for J.P. Morgan. Chatterjee takes over from Rod Hall, who left last year to go to Goldman Sachs. Chatterjee’s starting price target today ($272) is $96 higher than Hall’s last target at J.P. Morgan ($176) and $36 higher than Hall’s current target at Goldman Sachs ($240).