By Sam Boughedda
In a note to clients on Friday, Needham & Company analyst Laura Martin said they believe Apple's (NASDAQ:AAPL) brand is worth $1 trillion.
The analyst states in the note that for consumer-facing companies, brand value is a lead indicator of consumer adoption, churn levels, and pricing power.
"The latest two brand value studies show that Apple's brand is #1 and improving faster than many other consumer brands. For example: 1. Kantar's BrandZ's "Most Valuable Global Brands 2022" study, published this week, concludes that AAPL is #1, up 55% y/y, and is on track to become the first trillion dollar brand," said Martin. "We argue that the best way to think about AAPL’s valuation, pricing power, competitive advantage period and barriers to entry is through the lens of 1B+ of the wealthiest consumers in the world, each using AAPL devices 3-5 hours per day."
The analyst concluded they believe LTV is the primary driver of upside value for Apple and that brand value is a leading indicator of LTV.
"We believe that AAPL's rising brand value is a lead indicator for falling customer acquisition costs and churn levels, and rising pricing power. Each of these adds to AAPL's LTV, and we are buyers of AAPL."