Apple
has fallen back from its milestone $3 trillion market capitalization but a new price target implies gains that should carry it past that level and beyond. Fresh analysis also suggests that not even a spending slowdown may hurt the stock.
Shares in
Apple
(ticker: AAPL) were up 0.3% in premarket trading Tuesday and poised to open above $189, but still shy of the roughly $190.73 level that marks a $3 trillion market cap, which the company surpassed on June 30 before sliding back. A new $200 price target on the stock from analysts at KeyBanc Capital Markets—which rates the shares at Overweight—however suggests the $3 trillion level may not be far off.
Analysts led by Brandon Nispel at KeyBanc raised their price target on Apple despite the fact that an analysis of proprietary data suggests that a spending slowdown is heading for the tech giant.
There are bigger things driving the stock.
Citing data from more than 1.8 million unique KeyBanc credit and debit card customers in the U.S., Nispel detailed how indexed spending on Apple transactions of $400 or more jumped 23% month over month in June. But don’t get excited: The data show a -15% slide quarter over quarter, which is worse than the three-year historical average of 9% decline in the three months to the end of June.
“Overall, our data is telling us we should expect below average growth in [the third quarter of 2023],” Nispel said. “While our Apple direct channel data is showing softness, we also believe domestic iPhone sales are being pressured from slowing U.S. carrier activity (indirect channel) and lower upgrade rates.”
However, it’s possible that a gloomier outlook for spending may not even hurt Apple—one of the biggest names in tech that continues to see new products as a catalyst for the stock. And, given how it’s the largest public company, the shares may increasingly be viewed as a haven in turbulent market.
“We believe the bull case for the stock with excitement around new products and investors reaching for safety is resulting in an elevated multiple,” the KeyBanc analysts said.
Just what’s driving Apple’s gains should be something for investors to chew on as the stock yet again nears the shiny $3 trillion market cap level.
Write to Jack Denton at [email protected]
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