Apple won’t get 5G iPhones until next year, but already it’s causing investment analysts to geek out on the hype.
In a new note to clients, an analyst for investment banking firm Raymond James raises the firm’s price estimate on Apple due to the next-gen connectivity technology. That’s despite the fact that he thinks this year’s iPhone refresh will be a disappointment.
“Our more recent checks suggest that Apple plans to bring 5G to a wider range of iPhone models,” Raymond James analyst Chris Caso writes in a note to clients. It’s not clear if Caso has his own sources, or is reiterating those from others.
Last month, noted Apple analyst Ming-Chi Kuo of TF International Securities said that Apple will bring 5G to the iPhone in 2020. A recent study found that users can expect 5G to bring download speeds that are 2.7x faster than 4G.
As a result of 5G mania, Caso thinks that Apple shares will benefit from “increased conviction in the impact of a 5G iPhone product cycle in 2020.” Due to this, Raymond James has raised its target price for Apple to $250. Currently, Apple is trading at $205.66. That would mean an approximately 22% increase in Apple’s value. As a result of the change, Caso upgrades Apple to “outperform” from its current level of “market perform.”
It would also have the effect of pushing Apple over the $1 trillion mark again. According to the most recent calculations, AAPL needs to hit $217.34 to reach $1 trillion. The company is currently valued at $946.25 billion.
But maybe hold off
So should you throw all of your money into AAPL right now? Slightly confusingly, Caso thinks… maybe not? “Our call may well be early,” he notes. “We expect this year’s iPhone cycle to be the weakest in years, and today may not be the right time to buy ahead of that weakness.”
Caso’s comments follow increasing evidence that this year’s iPhone upgrade will be marginal. Aside from a camera update, it’s unlikely that too much else will change.
Still the firm is letting you know so that clients can take a punt if they want. “We’ve decided to upgrade now and let our clients decide the best time to execute on our idea,” he noted.