Apple’s Biggest Bull Sees 40% Return

Earlier this year, global tech titan Apple Inc. (AAPL) became the first U.S. corporation to reach a $1 trillion market capitalization. With Apple shares up nearly 31% year-to-date (YTD), outperforming the broader S&P 500's 4.5% return, one analyst says it's still not too late to profit off the smartphone maker. 

Street's Expectations for iPhone Unit Sales Too Conservative, Says Tech Vet 

Tech industry market watcher Daniel Ives became the Streets biggest Apple bull on Thursday, initiating coverage on shares of the Cupertino, Calif-based company at outperform, as outlined by CNBC.  The industry vet expects the stock to gain another 40% from Friday morning at $221.07, to reach $310 over 12 months. 

Ives, who recently moved from GBH Insights to Wedbush Securities, wrote a note to clients indicating that his peers on the Street are underestimating the demand for Apple's higher-priced, higher-margins iPhone models this year. 

"With positively trending average selling prices that we believe can approach about $800 in fiscal 2019 and healthy gross margins heading into this 2019 product cycle that are showing no signs of abating ... we believe many of the growth fears on the Street have been alleviated around Apple in the near term," wrote the Wedbush analyst. 

Apple's three new iPhones released in September, the XS, XS Max, and XR, include the same new features found in the last generation phones such as Face ID and wireless charging, yet offer larger screens and improved memory. 

While the Street is focused on Apple's ability to sell its latest generation of iPhones, Ives is forecasted for unit sales well above the consensus estimate, at 350 million units over the next 12 to 18 months compared to the Street's forecast at just 220 million. 

Moving forward, Ives views the upcoming product cycle as a "linchpin" for CEO Tim Cook and team to "lay the groundwork for 'steady' iPhone growth for the new few years." He expects the new batch of devices to help capture the underlying demand/upgrades among customers that decided to pass up on the iPhone 8/8+/X cycle. 

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