Throughout the past few quarters, Apple has outperformed its market competitors. As a result, financial analysts have maintained high expectations for the Cupertino-based tech giant. They’ve also continued expecting favorable price targets for Apple stock. Recent fears surrounding economic uncertainty, however, are leading some financial analysts to lower their expectations for Apple.
Updated to correct JP Morgan’s position on Apple stock price target.
Doubt Over Whether Apple Can Continue to Outperform the Market
Over the past 10 years, Apple shareholders have enjoyed great profits from the tech giant. Apple stock has more than tripled the S&P 500 returns, and Cupertino’s market capitalization currently accounts for about 7% of the S&P 500.
According to Seeking Alpha, though, Apple might not be able to maintain such momentum. In fact, the publication thinks Cupertino’s room for margin improvement is all but gone. Unless Apple can “find a new disruptive innovation that can move the needle,” it says, the tech giant may find itself actually underperforming the market over the next 10 years.
Of course, Apple may have just such a disruptive innovation up its sleeves, perhaps even two. We continue to expect the iPhone maker to introduce its own mixed-reality headset in 2023. Full-on AR glasses could follow by 2025, which would certainly buoy the company’s market performance.
Then there’s the long-rumored Apple Car. While we haven’t heard much on that front in recent weeks, most observers continue to expect Apple will debut its own autonomous vehicle within the next few years. Unfortunately, Project Titan hasn’t produced much to show for the vehicle yet. The group has also suffered a number of key player departures, while only replacing a few of them.
Financial Analysts at JP Morgan Maintain Previous Apple Stock Price Expectations
Meanwhile, investment firm JP Morgan also sees some reason to be concerned. The firm previously predicted Apple’s stock rising to $200, and that hasn’t changed.
The firm acknowledges struggles with meeting demand for the iPhone 14 Pro models continuing to hinder the tech giant. Lead times for the higher-end devices have increased to 40 days in the U.S. and the U.K. At the same time, demand seems lower than desired for the base-level iPhone 14. U.S. lead times for that handset sits at around three days, with only a one-day delay in the U.K.
With the increasing lead times for the iPhone 14 Pro, low demand for the consumer model and heightened economic worries, JP Morgan still maintains its price target for Apple stock. Analyst Samir Chatterjee reiterated his $200 target as of Nov. 20.
As of this writing, Apple’s common stock had closed down $3.28 to $148.01, a 2.17% decrease over its closing price Nov. 18.
Note: I am not an investment advisor and do hold a minor share in AAPL. Nothing in this article should be taken as investment advice.