Tim CookSource: Apple

What you need to know

  • Apple might be on its way to becoming a $2 trillion business.
  • That's according to analyst Amit Daryanani.
  • He has raised his Apple share target price to $360.

An analyst has predicted that Apple could be on its way to becoming a $2 trillion company.

As reported by Barron's:

Evercore ISI analyst Amit Daryanani thinks the stock can go higher, and maybe a lot higher.

In a research note, the analyst laid out a path for Apple (ticker: AAPL) to achieve a $2 trillion valuation, a level no company has reached. He thinks the stock can get there over the next four years, which implies annual appreciation on a percentage basis in the mid-teens.

Daryanani predicts that Apple's core business will continue to keep growing at its current rate and that the companies valuation will rise along with it. He estimates that Apple might reach up to $23 in earnings per share, which would be just shy of double his estimate for this year. In particular, he notes Apple's services and wearables, which he believes will see "sustained double-digit growth", with revenue pushing $60 billion from Apple's wearables business over the next few years. At the same time, he estimates services could soon be worth $100 billion in revenue.

The analyst noted that Apple is expected to continue "aggressively buying back stock", reducing its share count by 1 billion to 3.6 billion by 2024. As such, Apple would need a share price north of $550 to attain the $2 trillion valuations.

He further notes that "Apple continues to offer the best risk/reward in large-cap tech and long-term investors should use any weakness to add to positions" and upgraded his target share price for the company to $360, in line with a recent J.P Morgan target price of $365.