Side view of the Apple Vision Pro
After weeks of analysts downgrading Apple, Bank of America has raised its price target from $208 to $225 on the strength of both iPhone and Apple Vision Pro.
In a reversal of Barclays, which cited weak iPhone demand as a reason to downgrade Apple, BofA’s Wamsi Mohan sees increased production as justification to raise the company’s price target. The news comes as Apple begins taking pre-orders for its new Apple Vision Pro, but Mohan’s reasoning is centered as much on the iPhone and future use of generative AI.
According to Mohan, in a note seen by MarketWatch, there is now the potential for a “stronger multi-year iPhone upgrade cycle.” Specifically, he expects that interest in AI will spur users to buying new devices that can utilize it.
“Given the mix shift to services and increasing vertical integration we see more stable [gross margins] significantly north of 40% that can drive the relative multiple higher,” he said. “We do not expect the relative multiple [to] compress much lower, especially below 1.2x, which in our opinion would make for an even more compelling reason to own shares of AAPL.”
