Wedbush adjusts AAPL price target to $150 after four-for-one split

Credit: Andrew O'Hara, AppleInsider

Apple announced its stock split during its July 30 earnings call, a move that would make the stock "more accessible" to a broader range of investors. In the split, each shareholder received four times the number of shares with each one worth 25% less.

In a note to investors seen by AppleInsider Wedbush lead analyst Daniel Ives has taken the stock split into account with a new 12-month price target of $125.

The analyst added that the split on Monday "speaks to Cook & Co. in a major position of strength with clear tailwinds" heading into the company's 2020 iPhone season.

Ives expects the "iPhone 12" lineup to spark a super cycle when it debuts in early October, citing the fact that 350 million of 950 million iPhones are in an upgrade opportunity window. Ives calls that a "once in a decade" opportunity for Apple, and adds that the company is Wedbush's favorite 5G play.

Wedbush also takes Apples services business into account, calling it a rock solid source of recurring revenue in the midst of coronavirus.

The new $150 price target is based on a sum-of-the-parts valuation on Wedbush's 2021 Apple estimates. It includes a 15x multiple on Services at $900 billion and a 7.3x multiple on Apple's hardware ecosystem at $1.7 trillion.

In a bull case, which could see the share price rise to $170, those 2021 valuations are upped to a $1.1 billion valuation of Apple's Services business and a $2 trillion valuation of the company's mature hardware business. Ives doesn't give a concrete driver of such a case.

Shares of AAPL were trading at $128.30 post-split on Monday, up 2.82% in intra-day trading.