What you need to know
- The iPhone 13 might turn Apple's underperformance around.
- JPMorgan believes the company will sell 226 million iPhones next fiscal year.
Apple has been underperforming compared to the S&P 500 this year, but that might turn around once the company releases all of its new products in the fall.
In a new investor note seen by Business Insider, JPMorgan believes that Apple's stock performance is set to turn around when the company announces the iPhone 13 in a few months. The bank has upgraded the price target for AAPL from $165 to $170, which would equate to a 21% increase in stock performance currently.
The bank believes that a number of factors contribute to their prediction, including lower investor expectations for the company.
"The upside pressure on volumes for the iPhone 12 series, historical outperformance in the July-September time period heading into launch event, and further catalysts in relation to outperformance for iPhone 13 volumes relative to lowered investor expectations implies a very attractive set up for the shares in the second half of the year and thus expect AAPL shares to outperform the broader market materially in 2H21."
JPMorgan notes that Apple's stock has commonly shot up if the company outperformed investor expectations or if the company experienced a solid release of a new iPhone.
"We see the iPhone 13 launch as more of the latter, similar to the iPhone 11 cycle, with a multi-year 5G tailwind to the replacement rate and a larger installed base supporting stronger run-rate of annual volumes relative to current investor expectations.
"Net net, following a period of limited interest and underperformance in the shares, we believe the tide is set to turn [for Apple's stock price].
The bank expects Apple to ship as many as 226 million iPhones in the 2022 fiscal year. That would be a huge jump from other reports that expect shipments of 210-215 million units.
Apple is expected to announce the iPhone 13 this fall with some notable camera, display, and battery upgrades. If you want even more battery in your iPhone, check out our list of the Best iPhone 12 battery cases 2021.