Apple (AAPL) stock could skyrocket and climb by 50% ahead of the iPhone 7 release, says Piper Jaffray analyst Gene Munster. Shares surged Friday following his bullish report, climbing by more than 5.30% to finally top $100 and closing at $101.42. The stock hasn’t touched $100 in several days but then only briefly. It hasn’t spent a sustained amount of time higher than $100 since earlier this month, although Apple shares have spent most of the year in a steady downward trend.

 

A history of Apple’s stock cycles

In a report dated Jan. 21, Munster explained the historical trends Apple stock has followed in and around each iPhone cycle. He expects the iPhone maker’s shares will behave in a similar fashion to how they did in past iPhone number change cycles and that the company’s P/E multiple will expand before the launch of the iPhone 7. He added though that the difference this time around is that iPhone unit shipments are expected to decline for the first time ever in the March quarter. Currently he is expecting a 10% unit decline year over year.

Munster also took a look back at Apple’s stock price movement, noting that in only one month did the stock trade at a lower multiple than the current one, which is 9.7 times Munster’s calendar year 2017 earnings per share estimate. In April 2013, shares were trading at 8.94 times forward earnings per share after the iPhone 5 launch didn’t go as well as investors had hoped it would. The March 2013 quarter saw iPhone units grow in the single digits, and Apple had more than one forward quarter of revenue growth in the single digits.

Apple will recover

The Piper Jaffray analyst adds that there are many similarities with 2013. He notes that the iPhone 6s cycle was “relatively disappointing” and that Wall Street is widely expecting iPhone units to decline year over year for the March quarter. Also it’s expected that we’re seeing multiple quarters with growth in the single digits again.

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