BREACHING US$1TRIL VALUATION
Positive reviews for new iPhone have sent Apple’s stock to record highs
APPLE Inc chief executive Tim Cook quashed concerns recently about muted demand for the iPhone X, saying preorders for the 10th anniversary smartphone were “off the charts”, but it might be the company’s market capitalisation that needs a bigger graph.
Positive reviews for the new device and expectations that many users are on the verge of upgrading from older iPhones have sent Apple’s stock to record highs, pushing it closer to becoming the first publicly listed company with a stock market value above US$1 trillion (RM4.23 trillion).
“Apple is taking the iPhone franchise to a whole new level with the iPhone X, pushing the company deep into the ultraluxury smartphone market,” Drexel Hamilton analyst Brian White wrote in a note to clients ahead of Apple’s quarterly report after the bell yesterday.
Ahead of the release today of the redesigned glass and stainless steel device, some analysts have questioned its price tag: At US$999 for the base model, it is the most expensive iPhone to date.
But Cook said last week pre- orders of the iPhone X were “off the charts”, while the company’s website showed delivery times pushed out to five to six weeks.
At Wednesday’s US$166.89 stock price, down 1.3 per cent from a record high, the Cupertino, California company’s market capitalisation sto o d at US$862 billion.
Since the first iPhone in January 2007, Apple’s stock has surged almost 1,300 per cent, compared with the S&P 500’s 83 per cent increase. Including dividends, Apple’s total return has been about 1,400 per cent.
Apple’s stock has risen 26 per cent per year on a compound basis since the start of 2007, a trajectory that — based on its current shares outstanding — could see it reach a market capitalisation of US$1 trillion in middle of next year.
The mean price target of 37 financial analysts stands at US$176.70, equivalent to a market value of US$913 billion.
At least four analysts have target prices for Apple that put its market value above US$1 trillion. Drexel Hamilton’s White, the most bullish among Apple analysts tracked by Thomson Reuters, has a target price of US$208, equivalent to a market capitalisation of US$1.074 trillion. Reuters