Can apple stock reach $1000? Apple Stock Forecast Today
Latest Apple Stock Price
It is true that Apple has weathered a downturn like no other, but how much steam is still left in the stock? Can the share price march towards $200 next year or more optimistically will apple reach $1000 ever in the future? Let’s find out
Apple Inc has proved to be a safe investment in the downturn market in 2022. While major tech stocks like Netflix are down by 50% in the last year, Apple shares are down by only 10%. It has also beaten the major indices with Nasdaq 100 down by about 25% (as of 1.12.2022).
Can Apple Stock reach $1000: Positives and Negatives
Growth of the service segment – One of the primary reasons for the outperformance of Apple’s share in 2022 is its minimal dependence on the advertising industry. Apple Inc has promoted its service business quite a bit in the last couple of years. The result is, it is the highest-margin business for the company. In the recent quarter, the service sector contributed 20% out of $90 billion in revenue but made up one-third of net income.
The service sector is not only growing but its profit margin is also climbing. In the latest quarter, the profit margin for the product segment dipped 152 basis points while for the service segment it rose 169 basis points. Surely, the service sector is the one to look out for in the upcoming decade.
Disruption in iPhone manufacturing- Present investors are mostly concerned about Apple’s dependence on China for iPhone manufacturing. Covid-19 cases are again rising in the country and due to government policies, several lockdowns have been announced in the past couple of months affecting iPhone manufacturing. There has been considerable pushback from the workers at Foxconn, the plant responsible for 70% of iPhone shipments.
Although, Apple is trying to diversify its iPhone manufacturing in India and JP Morgan Chase estimates that around 25% of Apple’s products will be produced in India by 2025. But the company expects that it will produce at least 3 million fewer iPhone 14s this year than earlier estimated. Dependence on China may hurt Apple in the upcoming years also.
A Look at Valuations of Stock to Reach $1000
The current share price for Apple Inc is $147.81 (as of 2.12.2022). It is currently trading at price to earnings ratio (P/E) of 24.30 and has earnings per share (EPS) of 6.11 and hence the share price of $148.
Now the service segment is projected to grow at a compound annual growth rate (CAGR) of 3% through 2030 from 2021 and generate $388 billion and the service segment is expected to grow at a CAGR of 18% to $304 billion. Hence, total revenue by 2030 is expected to be $692 billion of which the service segment will contribute 44% and the hardware segment will contribute 56%.
Similarly, earnings per share are expected to reach$7.96 by 2026 from $5.61 in 2022 and grow at a CAGR of 7.24%. Considering the growth potential of the service segment, it will be modest to assume a CAGR of 10% for the next 10 years.
The earnings are expected to reach $14.55 by 2031. The five years mean P/E is 24 and P/E is expected to grow further for the next few years due to the service segment. Assuming a modest P/E of 25, the target share price for 2031 comes out to be $363. Hence, $1000 is just too far away even for a growing and stable company like Apple Inc.
Also Read: Apple Stock Forecast 2023
|Metric||Last 24 Hours||Trend|
|Net Social Media Sentiment||6||Neutral|
Can apple stock reach $1000?: Conclusion
Apple Inc is not one of the fastest-growing companies, but it is one of the most stable companies. Its position in the service segment and free cash flow gives it an edge over its peers. Will Apple reach $1000? It may be a too optimistic target for Apple shares but it is surely a bet for the long term. Also, do not forget the fruits of share buyback, which Apple Inc is famous for.
Apple Stock Forecast Today
|Overall Outlook||Partially Negative|
|1. Market's Wisdom||Partially Negative|
|1a. Market Data||Neutral|
|1b. Technical Recommendation||Sell|
|2. Crowd's Wisdom||Neutral|
|2a. Social Media Buzz||Steady|
|2b. Social Media Sentiment||Neutral|
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Index or Individual Stocks. Please consult a registered investment advisor to guide you on your financial decisions.