UBS analyst David Vogt raises Apple (AAPL) stock to a Buy, raising his price target to $142 from $115, highlighting the company’s ambitious entry in automotive space arguing “auto optionality will offset a ‘normal’ iPhone Cycle.”
Vogt predicts Apple can capture some of the battery electric vehicle (BEV) market given customer satisfaction is already high for the tech giant’s products.
“Our analysis of the auto market and Apple’s multi-year investment in the industry (self-driving car licenses and LiDAR patents) suggests to us Apple’s auto optionality is worth at least an incremental $14/share,” Vogt stated in a research note to clients. “Apple’s current portfolio provides significant cash flow the company will likely utilize to enter the battery electric vehicle market.”
Even though Apple is not the first entry in the space, Vogt argued the company’s “significant resources” will enable the company to be a “fast follower”.
“Our base case assumes Apple captures 8% of global EV units in 10 years with operating margins approaching 15%,” wrote Vogt.
“We expect Apple’s platform strategy and market share in the global PC and smartphone markets should enable Apple to introduce a branded BEV and achieve a minimum 5% market share in the global BEV market,” he wrote. “Over the next ten years, we forecast the global automotive market will likely transition to almost 100% EV opening up a 90M unit market to new entrants with large installed bases of loyal satisfied customers like Apple.”
Dow 30 component Apple (AAPL) has revolutionized personal technology with the introduction of the Macintosh in 1984. Today Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch, and Apple TV. Apple’s four software platforms — iOS, macOS, watchOS, and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to “leaving the world better than they found it. To learn more about Apple (AAPL) and track its ongoing progress at Vista Partners Apple (AAPL), Coverage Page.
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