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The Path for Apple Shares to Rocket to $200 Ahead

A new street-high analyst call has been laid for Apple Inc. (NASDAQ: AAPL). Sort of. Steven Milunovich of UBS has opined that Apple shares could hit $200 per share over the next few years — implying a gain of about 42% without consideration of dividend payments and raised dividends in the next couple of years.

What investors need to consider about this analyst call is that $200 is not an official target price. UBS’s official rating is Buy and its official price target is $151. Thomson Reuters shows that the official street-high analyst target price is actually $185.

A lot of things were shown that have to go in Apple’s favor for investors to see that much higher share price. Without calling that a bull market has to occur, Milunovich said that the following events need to occur to get Apple’s share price up to $200:

  • Apple’s iPhone sales need to continue to grow beyond 2018;
  • Apple must also get some new product categories established;
  • and Apple needs to spend over $50 billion per year in stock buybacks.

These efforts would boost Apple’s price-to-earnings (P/E) ratio to 17. Before thinking that this is a raging bull analyst upgrade, there are some downside risks outlined as well. First off, Apple has been quite slow to unload new major product categories which could make a meaningful change to the revenues and earnings (ditto for expenses and...