Shares of Apple (AAPL 1.27%) may have closed lower in back-to-back trading days since Tuesday's iPhone X event, but it doesn't mean that all of Wall Street is down on the stock. Hilliard Lyons analyst Stephen Turner is boosting his price target on the world's most valuable consumer tech company up to $182.
The iPhone X hitting the market in early November was a few weeks later than he was expecting, something that is clearly weighing on post-event sell-off. Turner is still encouraged to see that Apple is sticking to its guidance for the fiscal fourth quarter that ends this month. He is reiterating his Long-Term Buy rating on the shares.
Image source: Apple.
X marks the spot
Like many Apple watchers and all Apple bulls, Turner has spent this year nudging the tech darling's price goals higher. He was perched at $131 when the year began, lifting his price target to $147 in March, $170 in May, and $180 just last month. Wednesday's update to $182 is the smallest of his increases, but it's an uptick all the same.
Wall Street pros are merely catching up with investors. Apple stock has risen 38% so far this year. Even the recent sell-off isn't scary. The stock closed on Wednesday just 3% below the all-time high it had notched two weeks earlier. We may not have gotten a euphoric rally following the unveiling -- not a surprise in light of the stock's big run and the early leaks of many of the features and price points -- but it's not as if the market's turning its back on the stock.
At least seven analysts have boosted their profit forecasts for fiscal 2018 in light of the iPhone X release date and price being announced. The overall impact isn't dramatic at the moment. The average estimate for Apple's earnings per share in the fiscal year that begins next month has grown from just $10.88 to $10.91 over the past week. However, it does mean that the consensus is that Apple's earnings per share will now rise 21% in fiscal 2018 after a more pedestrian 8% uptick in fiscal 2017.
Apple stock trades at a reasonable 14.6 times the profit outlook for the year ahead. The market will be concerned about what happens after the upgrade cycle for the iPhone X -- and to a lesser extent this month's iPhone 8 -- has run its course. Despite well-received if not overdue updates to its Apple Watch and Apple TV franchises, this remains a company that lives and dies by iPhone rollouts.
These are interesting times for Apple, and the next two quarterly reports will be critical in dictating whether Apple holds on to this year's gains and ideally pads on to them. The fiscal fourth quarter of 2017 will let us know if the iPhone 8 was enough of an upgrade to inspire an early rush to trade up, knowing that the iPhone X is rolling out just six weeks later. The first quarter of 2018 will mean everything else, and that's a lot.
