Apple’s stock rose Monday’s 0.5% to finish at $267.10, setting a new record high, the 8th since early November! According to Bloomberg, Apple’s sales in China would have risen to 10 million units in September and October, up 6 percent from the same period in 2018. In a market global smartphone decline by 5% in China in September-October.
The Chinese would be particularly fond of the new iPhone 11, offered at attractive prices compared to the very high end iPhone XR. The device also benefits from a VAT cut on 1 April in China.
This is good news for the Californian group, which faces in China a very strong competition from local brands (Huawei, Xiaomi) as well as calls for boycott in the current context of commercial war. Apple was also attacked by Beijing for providing pro-democracy protesters in Hong Kong with information via the HKmap app. Under pressure from the Chinese authorities, Apple had to remove this “app” from the App Store in September.
Apple’s stock posted the biggest rise in the Dow Jones since the beginning of the year, with a jump of more than 69% against a rise of just over 20% for the New York flagship index.
Apple also benefited on Monday from favorable notes from brokers. Wedbush raised its price target to $325 (previously $300), while JP Morgan estimated that Apple’s advertising revenue potential was “underestimated” by the market.
While the stock has risen sharply this year, “we believe the tech stalwart is still in the midst of a renaissance of iPhone growth heading into 2020 that will further catalyze the stock higher as it gets re-rated from the Street,” writes Wedbush.
For its part, JP Morgan, which also recommends “overweight” (“buy”) the Apple stock, raised its price target to $290 against $280, believing that investors have neglected the potential of Apple to reap advertising revenues. Markets have been busy looking for new opportunities for Apple in services like Apple TV +, Apple Arcade, Apple Pay and Apple Music, and have underestimated its advertising potential. The latter benefits from the migration of the advertising market to mobile media, where Apple is ideally placed with its installed base of nearly one billion iPhones users, notes the JPM analyst.
