On Friday, Baird maintained its positive stance on Apple Inc (NASDAQ:AAPL), raising the stock's price target to $260 from the previous $240. The firm continues to endorse an Outperform rating for the tech giant's shares, which currently commands a substantial market capitalization of $3.75 trillion.
The adjustment in the price target comes amid Apple's stock trading at approximately 32.8 times Baird's anticipated calendar year 2025 earnings per share (EPS), compared to the S&P 500's average of around 22 times next twelve months (NTM) earnings. This valuation indicates that Apple is enjoying a roughly 50% premium over the broader market index, which is just shy of its all-time highs from last year.
The new price target of $260 is derived from a 34 times multiple on Baird's forecast for Apple's calendar year 2025 EPS. This valuation is at the upper end of Apple's historical price-to-earnings (P/E) range, which spans from 10 to 35 times. Baird's assessment reflects a premium valuation relative to other leaders in technology and consumer staples sectors.
Baird's optimistic outlook is based on several factors, including Apple's robust execution, an increasing contribution from its services division, ongoing benefits from its ecosystem, and the company's strong generation of free cash flow. These elements collectively justify the premium valuation for Apple's stock in Baird's analysis.
The firm's commentary highlights Apple's financial performance and strategic advantages, which are expected to support the company's market valuation and investor confidence going forward.
In other recent news, Apple Inc. has announced plans to introduce its own Bluetooth and Wi-Fi chip, known as Proxima, in 2025. The development of this chip is part of Apple's broader effort to control more of the hardware that goes into its devices.
Morgan Stanley (NYSE:MS) has maintained its Overweight rating and $273.00 price target for Apple, highlighting the company's strong performance and anticipating over $8.50 in earnings per share by fiscal year 2026. The firm also sees potential for further iPhone gross margin upside, which could contribute to Apple's financial performance.
On the other hand, Bernstein SocGen Group has maintained its Outperform rating for Apple, despite challenges with the implementation of agentic AI features. The firm remains optimistic about the iPhone 17 cycle, anticipating it will benefit from enhanced AI capabilities. Meanwhile, Citi has reiterated its Buy rating on Apple with a steadfast price target of $255.00, following the release of iOS 18.2.
In addition, Apple recently reported a record-breaking total revenue of $94.9 billion for the final quarter of 2024 and announced plans to invest $1 billion in a new manufacturing facility in Indonesia. MDA Space Ltd, a collaborator with Apple, is forecasted to experience over 25% growth in the coming years, according to BMO Capital Markets. These are the most recent developments in Apple's ongoing pursuit of growth and innovation.
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