Apple‘s annual September event is set for Tuesday, and that means it’s almost time for new iPhones. An analyst at Baird is even more bullish on the tech giant’s stock ahead of the unveiling.
Baird analyst William V. Power raised his price target to $170 from $160 in a note to clients on Wednesday, writing that he expects the company to unveil an iPhone 13 that includes incremental upgrades, like an improved battery and camera.
“Rumors regarding satellite connectivity could provide differentiation at some point, though inclusion in this cycle is less clear,” Power wrote. “In addition to iPhone, we also expect Apple Watch 7, along with other possible updates.”
Apple stock (ticker: AAPL) fell 1% to $155.11 in Wednesday trading, while the S&P 500 index fell 0.1%. The stock rose 1.6% on Tuesday, after the event was announced.
Power refers to a Baird survey that found 45% of the 1,500 respondents in the U.S. claim to have used their current iPhone for two years or more, suggesting more people may be thinking about upgrading their device soon.
“While upgrade cycles have lengthened, we expect the addition of 5G tocontinue to drive a healthy upgrade opportunity over the next several years,” he added.
He does note that the company is set to face tougher comparisons as sales figures stack up with last year’s pandemic-boosted period. He expects year-over-year growth to slow toward the end of the year, but thinks if such a slowdown spooks the market it could provide a buying opportunity for patient investors.
“While [year-over-year comparisons] will become more challenging and regulatory pressures could increase, we remain focused on the long-term eco-system opportunity coupled with the company’s strong profitability and cash flow,” Power wrote. “We continue to view shares as attractive for long-term oriented investors.”
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