Apple Inc.’s stock narrowly missed its first 10-session winning streak since 2010 on Tuesday, but the most valuable U.S. company still ended the trading session within striking distance of a $1 trillion market value.
Apple’s AAPL, -0.30% market capitalization crossed the $950 billion mark in intraday trading Tuesday for the first time since the stock cratered in the fall, but shares retreated to a 0.3% decline by the end of the session. Apple shares need to close at or above $212.08 for the company to cross the $1 trillion market-cap threshold once again; the last time Apple had a market cap higher than $1 trillion was Nov. 1, 2018, according to FactSet. At Tuesday’s closing price of $199.50, Apple had a market cap of about $940 billion, 6.3% shy of $1 billion.
Shares tumbled then following Apple’s fiscal fourth-quarter earnings, on fears about the sustainability of Apple’s pricing model and its ability to grow device shipments. Apple’s first-quarter earnings report was presaged by a warning that sent shares even farther down.
Analysts have become gradually more optimistic about Apple’s prospects since, however. The company decided to do away with unit-sales metrics for the iPhone and issued a string of disappointing forecasts, but management has been trying to shift investor attention toward the opportunities offered by Apple’s faster-growing services business. For the most part, analysts are buying into this story, with several recently penning upbeat notes about various elements of the services segment in recent days.
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Health care wasn’t a focus of Apple’s services-themed event late last month, but Morgan Stanley’s Katy Huberty sees big potential in the company’s health efforts. She estimated on Monday that health care represents a $15 billion to $313 billion revenue opportunity for Apple by 2027, a wide range that assumes young iPhone users will be more inclined to view Apple as a health-care platform in terms of services and wearable devices.
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Wedbush’s Daniel Ives chimed in that “calm is being restored” to the Apple universe. He sees room for Apple’s services segment to exceed March-quarter expectations in an otherwise “ho-hum” earnings report, and he also expects “more significant” price cuts in China that could help drive upgrades of aging devices.
Ives raised his price target to $225 from $215 on Tuesday and maintained his outperform rating.
FactSet, MarketWatch
Apple is scheduled to report earnings on April 30, and the company is expected to provide more information about new services offerings focused on gaming, videos, and news, as well as an update on its capital-allocation program. In addition, investors will be looking for signs of stabilization in iPhone sales after the company experienced problems in emerging markets in its holiday quarter.
Apple shares have gained 28% so far this year, compared with a 12% rise for the Dow Jones Industrial Average DJIA, -0.72% of which Apple is a component. Since the end of January, analysts’ average price target on the stock has increased from $177.81 to $191.20, which is still about 4% lower than Tuesday’s closing price. Only one of 39 analysts covering Apple considers the stock a sell, while 20 rate shares the equivalent of a buy.
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