Apple shares will rise 20% after their stock split, according to this analyst. Is he right ?
Appleit is (AAPL 4.08%) the gains made so far in 2020 have electrified investors. Despite starting the year with a market valuation of over $1.2 trillion, the tech giant’s stock jumped 70%, creating fortunes for its shareholders along the way.
And yet, one analyst thinks Apple shares are set to rise further after its upcoming stock split.
On Wednesday, Wedbush analyst Daniel Ives reiterated his outperform rating on Apple and raised his price forecast from $515 to $600. Its new target price represents potential gains of around 20% for investors, based on the current share price of around $500.
Ives sees up to 350 million people upgrade to Apple’s next iPhone 12 model, which is expected to include the highly anticipated fifth generation (5G) wireless technology — over the next 18 months. The analyst says this iPhone supercycle is a “once in a decade” profit opportunity for Apple – one that many investors are yet to fully appreciate.
Will Apple shares continue to climb after its stock split?
If iPhone 12 sales blow up expectations, as Ives predicts, Apple’s stock will likely soar to $600 — and potentially even more — in the coming year. The iPhone is, of course, Apple’s most important product, and sales of new phones also tend to drive sales of apps and services, which could help boost profits significantly.
Apple’s upcoming stock split could also help fuel a rise in its share price. Despite the fact that a stock split does not change the fundamental value of a company, many investors are excited about the possibility of buying more shares at a lower price.
For these reasons, Apple shares could approach Ives’ $600 pre-split ($150 post-split) target price much sooner than many investors currently expect.