Apple currently has a market cap of roughly $US798 billion, but some analysts think the tech giant has the potential to surpass the $US1 trillion mark relatively soon.
If Apple can continue to increase revenue, expand both gross and operating margins, and sustain share buybacks, the Cupertino tech company could reach the $US1 trillion threshold within the next 12 to 18 months, according to a report released by RBC Capital Markets analyst Amit Daryanani.
RBC Capital Markets’ also raised its price target for Apple from $US157 to $US168 per share, based on optimism that Apple can reach $US12+ earnings per share in 2019. Reaching that price would push Apple stock into the $US192-195 per share range, which would push its market cap of over $US1 trillion, according to RBC.
“We believe AAPL’s current stock price creates an attractive entry point for investors to benefit from its ability to return to revenue and EPS growth in FY17,” writes Daryanani.
The report said that Apple’s unique advantages over its competitors should help it continue to lead the field.
“We believe AAPL’s true differentiation is its unique computing ecosystem: iOS,” the RBC Capital Markets report said. “iOS provides users with an integrated, scalable, and seamless experience across multiple devices, which we believe will be difficult for competitors to replicate in scale.”
Others believe Apple is in need of a “narrative shift” to significantly boost it’s stock price.
“Is Apple a hardware company subject to rapid commoditization or a sticky consumer-brand capable of driving sustainable growth at a high margin?” asked a recent UBS report. “Further price upside is more likely to come from earnings upside than continued multiple expansion.”
There are already positive signs in Apple’s customer loyalty metrics heading into the iPhone 8 release later this year, and the company is preparing to launch three new laptops in June at Apple’s annual Worldwide Developers Conference.