Any Apple (NASDAQ:AAPL) stock forecast has to recognize how critical the iPhone has been, but, as the company’s management team has proven, the company is far more than that. From its cloud business to its services and accessories (among other hardware devices), Apple is an absolute behemoth in the consumer discretionary sector.
Fluctuating between the world’s largest and second-largest company regularly, Apple keeps its power in the markets and remains a core portfolio holding of many passive investors (whether or not they know it). In fact, the market weighting for Apple remains at or near a market-leading level, for good reason. Let’s dive into why the company should be considered a core holding by active and passive investors alike.
Excellent Financial Reports
After Apple’s recent earnings report, 43 analysts projected the company’s 2024 revenue to come in at $388.3 billion, similar to the previous 12 months. Predicted earnings per share stood at $6.55, also consistent with last year’s results.
These were down from previous estimates, but the market has remained steadfast with its view that cash flow growth should remain robust at this mega-cap giant. For many, that’s enough of a reason to own this company at over 30-times earnings.
Analysts reaffirmed Apple’s consensus price target at $200, indicating they don’t expect lower revenue forecasts to affect its market worth. Now varied estimates resulted in this consensus estimate. These analyst price targets range from a bullish $250 to a bearish $125 per share, showcasing diverse perspectives on Apple’s future.
Aside from its gadgets, Apple also has a very strong services segment. The segment boasts $23.1 billion in revenue, and it has been helping drive the company’s to success. Because of its innovation, the stock surged about 23% in 2023 and is expecting to grow more in 2024.
Apple Vision Pro is a Game Changer
Wedbush analysts hailed Apple’s Vision Pro as a potential “game changer” post its store debut. They noted its early mass appeal and strong initial reception, surpassing expectations and foreseeing future integration with AI.
Apple’s Vision Pro entered the competition against Meta’s Quest 3, the leading AR headset in 2023. Despite its higher price starting at $3,499 compared to Quest 3’s $500, analysts viewed it as a valuable asset for Apple.
Bank of America estimated it could contribute 68-89 cents per share to Apple’s EPS over five years. They also foresee a multi-year iPhone upgrade cycle driven by generative AI.
Optimistic Outlook for 2024
In the recent earnings call CEO Tim Cook also highlighted some adjustments to Apple’s iOS, Safari, Apple Pay, and App Store that aligns with EU’s Digital Markets Act (DMA).
He emphasized Apple’s commitment to privacy, security, and usability, despite potential limitations due to regulatory compliance. Apple’s CFO Luca Maestri clarified these changes would affect only EU users, constituting approximately 7% of the global App Store revenue.
In the fourth quarter, Cook highlighted robust growth in emerging markets, including record-breaking sales in Malaysia, Mexico, the Philippines, Poland, and Turkey, and strong performance in India, Indonesia, Saudi Arabia, and Chile.
Despite declining sales in China, whereApple remains strong, this company is a top global smartphone seller, and will likely continue to be for years to come.
Buy AAPL Now
Apple is a company that is really unparalleled in the world of financial markets right now. The company’s recent product innovations, its pursuit of more ecosystem-driven services revenue, and its rock-solid balance sheet make this stock one to hold for the long-term.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.
