You are here

Apple may hit US$1 trillion market cap again on trade deal, says analyst

colin-ap-14.jpg
A resolution to the trade tensions between the US and China could add as much as US$25 a share to Apple Inc's stock price and take it back to a US$1 trillion market value, according to Wedbush Securities analyst Daniel Ives.

[LONDON] A resolution to the trade tensions between the US and China could add as much as US$25 a share to Apple Inc's stock price and take it back to a US$1 trillion market value, according to Wedbush Securities analyst Daniel Ives.

A US$25 increase would be about 13 per cent above Apple's closing price of US$194.15 a share on Thursday and would take its market value back into 13 figures. Apple in August became the first U.S. company with a US$1 trillion value, though it's been below that since November.

A US-China deal "would take away the primary China risk which is a dark cloud over the stock now," Mr Ives said in a note to clients. Investors now are pricing in a harsher impact on Apple than Ives sees playing out based on how the situation stands today, "despite the noise."

Mr Ives also said the risk-reward on Apple remains compelling at the current price and that the company is the safest among the FAANG stocks from any antitrust threats.

sentifi.com

Market voices on:

However, should the US go down the route of slapping more damaging tariffs on Chinese goods, this could be a "potential game changer" for Apple on the cost of producing iPhones, Mr Ives said, since it would only be able to move a limited amount of production out of China over the next year.

A resolution of the trade spat at the Group of 20 meeting in Japan at the end of the month could add US$20 to US$25 per share for Apple in coming months, Ives said.

BLOOMBERG