The big question Apple (AAPL) must answer in the coming year is whether its first 5G-enabled smartphones, the iPhone 12 series, will kick off a supercycle of upgrades. Or are the 2020 handsets just a plain old annual release? Apple stock investors are counting on the former.
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Most Wall Street analysts believe iPhone sales will return to growth next year. Some think iPhone 12 sales will eclipse the high-water mark of the iPhone 6, which offered larger displays than their predecessors.
Wedbush Securities analyst Daniel Ives predicts that 2021 will be “the year of the 5G supercycle” with Apple “the clear winner.” He rates Apple stock as outperform with a price target of 160.
In premarket trading on the stock market today, Apple stock climbed 1.2%, near 133.60.
Apple Stock Called ‘Core Portfolio’ Pick
“With more order activity kicking in over the last few weeks for iPhone 12, our reads are very bullish and give us incremental confidence in our supercycle thesis on iPhone 12,” Ives said in a recent note to clients. “We have not seen a launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014.”
JPMorgan analyst Samik Chatterjee is cautious about 5G iPhone sales against high investor expectations. In his report to clients, he said there are limited data points yet to indicate a supercycle is underway. Older model iPhones are continuing to sell well, Chatterjee noted.
Chatterjee rates Apple stock as overweight with a price target of 150.
Apple Mac computer and iPad tablet sales should see continued tailwinds in the first half of the year from the work-from-home and learn-at-home trends spurred by the Covid-19 pandemic, he said.
Plus, Apple’s wearables business should be a source of upside in fiscal 2021, Chatterjee said. Wearables include AirPods wireless earbuds and the Apple Watch smartwatch.
Evercore ISI analyst Amit Daryanani named Apple stock as a “core portfolio” pick for 2021 in a recent note. He rates Apple stock as outperform with a price target of 135.
He sees Apple benefiting from a trifecta of trends. They include the iPhone upgrade supercycle and monetization of its installed base through sales of services and wearables. Plus, Apple could see profit margins expand thanks to product mix, a benign commodity environment and easing Covid headwinds, he said.
Speculation Begins For iPhone 13 Handsets
CFRA Research analyst Angelo Zino said Apple stock investors should temper their expectations heading into 2021. Nevertheless, he rates Apple stock as buy.
“While we still anticipate a good year for Apple in 2021, it is safe to say that after tripling in value the last two years, gains are likely to moderate with the company now valued at over $2 trillion,” Zino said in a note. He believes Apple stock price already has pulled in expected 5G iPhone gains.
After refreshing practically its entire product lineup heading into the holiday season, investors are wondering what new products are coming from Apple in 2021.
The 2021 iPhones are likely to arrive in the usual September time frame, TF International Securities analyst Ming-Chi Kuo said in a note. Production snags related to the Covid-19 pandemic delayed the release of the iPhone 12 series to late October.
The so-called iPhone 13 handsets are rumored to include lidar sensors in all models. Lidar, short for “light detection and ranging,” is only available now with the high-end iPhone 12 Pro models. The rear-facing lidar scanner permits depth sensing for photo and video applications, including faster autofocus in lowlight situations. Plus, it opens new possibilities for augmented-reality experiences.
Apple Stock Nearing Buy Point
Kuo also has forecast Apple to release its third-generation AirPods in the first half of 2021.
Meanwhile, Apple reportedly is working on personal item trackers called AirTags. The trackers, similar to those made by Tile, would be for locating missing items like wallets, keys and purses.
Apple investors also will be looking for signs of Apple’s next big thing. Those long-rumored products include augmented reality smartglasses and an electric, self-driving car.
Apple stock is approaching a 138.08 buy point out of a cup base, according to IBD MarketSmith charts. Apple stock is also on IBD’s prestigious Leaderboard watchlist.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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