has pulled even with
in the endless fight for the title of the world’s most valuable public company. As of the close of trading, both Microsoft and Apple shares were valued at $1.378 trillion.
A pair of bullish research notes Wednesday helped Apple (ticker: AAPL) to catch up.
BofA Global Research analyst Wamsi Mohan repeated his Buy rating on Apple shares, lifting his target price to $340, from $320. In his note, he estimated that at the end of 2019, there were about 1 billion iPhones in the installed base, including 720 primary phone owners and 275 million people with used phones.
Mohan calculates that the installed base has grown about 9% a year for the last two years, driven primarily by the used-phone market, which he says has grown about 22% a year over that time.
Mohan said that expansion of the installed base from here is likely to continue to be driven by used phones and notes that an expanding base should eventually lead to higher consumption of services and sales of additional devices. He noted that Apple had 515 million paid subscriptions across its services businesses as of the end of the March quarter, and is targeting 600 million by the end of 2020.
“The confidence that the installed base for iPhones can be stable to growing should provide comfort to investors that iPhones are unlikely to get disrupted in the foreseeable future and hence drive about 200 million upgrades annually, which combined with growing services drives a premium multiple,” he concluded.
Deutsche Bank analyst Jeriel Ong also repeated a Buy rating on the stock, inching up his price target to $320, from $305. He noted that Apple plans to reopen 100 of its U.S. stores this week, bringing the number operating domestically to 130.
“We see store re-openings as a directional sign of improving trends and a drift toward a more normalized demand environment for Apple,” he wrote. ”While high unemployment and smaller consumer pockets have us worried for the next-gen iPhone launch that typically comes in September/October, we continue to tilt bullish on Apple.”
Apple shares late Wednesday were up 0.4%, to $318.08, less than $10 below their record high of $327.85. Microsoft (MSFT) shares were off 0.08% at $181.42.
Write to Eric J. Savitz at email@example.com