Apple Price Target: Will Apple breach $200 this year?

Apple Price Target: Will Apple breach $200 this year?
Apple Price Target for the next 12 months is $204. On a conservative basis, the Price could go as high as $350 by 2032

Apple Price Target 2022: Forecast for the Next 12 months

SourceDateTarget
Apple Price Target 2022April 12th$204

Apple Price Target Technical analysis-Finding Support and Resistances in Chart

Apple Price Target: Will Apple breach $200 this year?

Apple is in an uptrend with few drawdowns in the last 2 years.

We can see two major drawdowns, first in the month of January and again in the month of March 2022. Both are due to poor global cues, propelled by inflation fears in the US in the month of January and then the Russia-Ukraine war in March 2022. As Apple Inc trades in the upper half of the chart, inching towards an all-time high once again there are multiple supports and resistances will be created once it inks its presence in that territory.

Going forward, the first support comes at around $157, the level is seen on 7th September 2021, if Apple breaks that then $150 will be the next and very strong support. There are a number of reasons for the same, $150 low was formed on 15th March 2022 and the share took support at that level and reversed.

Also, the share price consolidated multiple times at this level in the month of July and Nov 2021. If shares break the $150 level, then $138 will act as support. It reversed from $138 on 4th October 2021, also it was trading close to that level before inching higher in the month of May 2021 and Feb 2021.


Talking about resistance, $179, which was touched on 30th March 2022 will act as immediate resistance, and thereafter $183, the all-time high it touched on 4th Jan 2022 will act as very strong resistance. Also, a trendline is drawn and Apple Inc should trade above that trend line going forward until it reverses its bullish trend. Support and resistances are tabulated below along with pivot points considering various methods.

S3S2S1PivotR1R2R3
Classic109.09138.60156.60168.11186.11197.62227.13
Fibonacci138.60149.87156.83168.11179.38186.34197.62
Woodie’s129.76139.93159.28169.44188.79198.95218.30
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Apple Target Price Analysis: Future Growth Prospects

Self-Driving Vehicle- If reports are to be believed, Apple Inc is working on self-driving electric vehicles which may be launched by 2026. Apple Inc engineers have built a prototype and are currently working on system integration. According to analysts, it can add up to $50 billion in revenue for the company by 2030. Considering the annual revenue of $350 billion, it is around 13%, which is outstanding. Apple Inc will cater to a large audience and has great growth potential in this area. It can give a major boost to earnings and share price in turn.  

The Metaverse Opportunity- Apple Inc is investing heavily to capture the market of AR/VR created in the space of Metaverse. Tim Cook, CEO of Apple Inc first talked about AR in the year 2017. According to reports, AR/VR headset can be launched by Apple Inc as early as this year-end. If that is the case, it is going to have a significant contribution to the revenue aspect for Apple Inc in the coming years. There is no denying that the Metaverse will be part of our life one decade down the lane. It will be interesting to note how Apple Inc captures this market.

Apple Target Price 2022 Analysis: Valuation

Currently, Apple Inc trades at a forward P/E of 25.6, which is towards the higher end of the spectrum. For example, in comparison with Alphabet and Facebook, which are trading at 18.9x and 14.8x, Apple Inc looks expensive.

Analysts expect that revenue for Apple Inc will grow around 7% in the coming years and thus earnings per share should increase by 10% considering buyback in the case of Apple Inc. The current EPS TTM is 6.08 and it is expected to be $15.90 in 2032. Considering Apple to trade at least 22x earnings per share, the target comes out to be $350.

Considering, a correction in P/E ratio, which can come due to rising interest rates by Fed or in case it matches its peers like Alphabet and Facebook, it is expected to trade at least 18x to 20x to earnings per share, and in that case, the target price for 2032 will be $286, which results in an annualized gain in the share price of around 5%.

But what stands out for Apple Inc in comparison to its peers is its cash reserves and free cash flow. So the better valuation metric to use is EV/EBITDA. The EV values take in account the net cash reserves and reward those companies. Apple Inc’s EV/EBITDA is 21.4x and is at par with its peers like Amazon and Microsoft Inc having EV/EBITDA of 21.3x and 21.8x respectively.

Apple Price Target Analysis: Conclusion

Apple Inc is the bluest of blue-chip companies with very strong fundamentals. Apple’s revenue has been beating estimates in every single quarter, but it is unrealistic for it to continue to grow at 50% after touching a market cap of $3 trillion.

There can be two types of price targets – one for 12 months and another for the coming decade. Apple’s share price is expected to hover between $150-205 for the next 12 months as the upside is limited due to inflation fears and uncertainties on the global front. At the same time downside is also limited due to the excellent results shown by Apple Inc in every quarter. For long-term price targets, car projects and AR/VR headsets and their success will play a major role. At present Apple is expected to give a decent annualized return of around 5-7% in the next ten years. 

Subhash

Subhash

Subhash, Founder of Crowdwisdom360 is an MBA and a Trained Financial Advisor with an extensive background in Forecasting in Financial Services and Politics. He has appeared many times on National TV and has written for a variety of magazines on Wealth Management and Election Strategy.