Apple ( AAPL ) stock received a price-target increase from an investment bank Tuesday on an improved outlook for iPhone sales in the company’s fiscal 2018, which started Oct. 1.
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Piper Jaffray analyst Michael Olson reiterated his overweight rating on Apple stock and raised his price target to 200 from 196.
“Despite potential for iPhone 8 to see a short-term negative impact from customers waiting for iPhone X, along with ongoing inventory shortages for iPhone X, we recommend owning (Apple) on potential for a strong overall fiscal 2018 iPhone cycle, rising (average selling prices) and a favorable services revenue trajectory,” Olson said in a note to clients.
Piper Jaffray recently surveyed about 300 iPhone owners and found “significantly higher upgrade intentions compared to a similar survey last year,” Olson said.
Nearly half of those surveyed indicated that they plan to upgrade within a year, he said. Survey results suggested many consumers are waiting for the iPhone X, which debuts on Friday. A shift to the premium iPhone X will provide a boost to average selling prices, Olson said.
Piper Jaffray is modeling for iPhone unit sales growth of 14% in fiscal 2018, vs. consensus expectations of 12% year over year.
IBD’S TAKE: Apple stock has an IBD Composite Rating of 81, meaning it has outperformed 81% of stocks in key metrics over the past 12 months. For more analysis on Apple, visit the IBD Stock Checkup .
About 50% of iPhone owners in Piper Jaffray’s survey indicated that they “will upgrade” or “may upgrade” their iPhone this year, compared with 35% in a survey last year. Some 31% said they “will upgrade” this year, compared with only 11% in last year’s survey, Olson said.
Apple shares were up 0.8%, near 168, in premarket trading on the stock market today . On Monday, Apple stock hit a regular-session trading high of 168.07. Apple stock broke out of a cup-with-handle base with a buy point of 160.97 on Friday.
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