JPMorgan sees a more than 20% upside in Apple stock

Apple Inc (NASDAQ: AAPL) shares have recovered close to 30% from the year-to-date low of $116 in early March. The stock is now exchanging hands near-record levels, but JPMorgan Chase says the rally could be far from over yet.

JPMorgan’s Samik Chatterjee, who has an “overweight” rating on Apple, lifted his price target on the stock to $180 on Thursday that translates to a more than 20% potential upside from here. Also on Friday, Apple delayed office return as COVID-19 cases started to climb again.

Chatterjee’s comments on CNBC’s “Power Lunch”

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In his research note, Chatterjee predicted better-than-expected sales for the upcoming iPhone 13 that could serve as a catalyst for the stock.

“Apple has established a technology leadership in the first generation of 5G phones. We expect that to continue beyond the first generation because 5G is not going to be a one-year phenomenon, it’ll be a multi-year upgrade cycle,” he said in his interview with CNBC’s “Power Lunch”.

The JPMorgan analyst also expressed confidence that the new affordable 5G enabled iPhone SE scheduled for early 2022 will continue the upgrade cycle and even see Android users switching to Apple because of its 5G leadership.

Chatterjee’s expectations for 2022

Chatterjee acknowledged that the 5G infrastructure was at very early stages and could take years before it becomes a staple. But an enhanced camera, bigger battery, improved security, and other such features on top of 5G compatibility will lure existing customers into upgrading and others into switching.

For fiscal 2022, his estimate for Apple’s revenue and EPS is now 2.0% and 7.0% above consensus, respectively. Chatterjee expects the tech giant to sell 246 million iPhones next year, which would mean another year of record iPhone sales.

JPMorgan’s bullish call comes a few weeks after Apple reported its third-quarter financial results that blew past Wall Street estimates.