On Friday, Maxim Group adjusted its outlook on Apple Inc. (NASDAQ:AAPL), increasing the stock's price target to $215 from the previous $203, while the Hold rating remains unchanged. The revision comes as Maxim Group applies a peer average price-to-earnings (P/E) multiple of 28.2 to its fiscal year 2026 earnings per share (EPS) estimate for Apple.
The firm's analyst justifies the new price target, stating that it reflects the application of the industry's average P/E ratio to the anticipated EPS. The EPS estimate for Apple's FY26 stands at $7.63. This updated target suggests that Maxim Group sees potential for the stock to grow based on these metrics, aligning with the performance of Apple's peers within the market.
At the time of the announcement, Apple shares (NASDAQ:AAPL) were trading at a P/E multiple of 29.6 times Maxim Group's FY26 EPS estimate. This valuation indicates a slightly higher trading multiple compared to the peer average used to determine the new price target.
Maxim Group's stance on the stock, as indicated by the Hold rating, suggests that the firm believes the current share price adequately reflects Apple's future earnings potential. The analyst's comment underscores this view: "With the shares trading at 29.6x our FY26 EPS estimate, we believe the risk/reward is balanced and maintain our Hold rating."
Investors may take note of this updated price target as they consider Apple's stock performance relative to its industry peers and the broader market. The new price target of $215 represents Maxim Group's assessment of the stock's fair value over the next 12 months, based on the firm's financial projections and industry comparisons.
In other recent news, Apple Inc. has reported robust earnings and revenue results, with iPhone sales showing a 6% year-over-year increase, surpassing projections. The company's guidance for the upcoming quarter suggests modest sales growth, with estimates of revenues and earnings per share at approximately $123 billion and $2.32 respectively.
However, Barclays has reduced its price target for Apple, citing anticipated lower iPhone sales for the upcoming quarter and potential challenges in the Chinese market. On the other hand, Citi, DA Davidson, Oppenheimer, and Wedbush Securities have maintained their positive ratings on Apple, with a particular emphasis on the potential $2 trillion valuation of Apple's services segment by Wedbush Securities.
In regulatory developments, Apple faced a setback in Indonesia due to non-compliance with local content requirements, resulting in a ban on iPhone 16 sales. Finally, Federal Reserve Governor Adriana Kugler is set to divest shares of Apple following unauthorized stock purchases made by her spouse, which violated the central bank's ethics rules.
InvestingPro Insights
To complement Maxim Group's analysis, recent data from InvestingPro offers additional perspective on Apple's financial position. As of the last twelve months ending Q3 2024, Apple reported a robust revenue of $385.6 billion, with a slight year-over-year growth of 0.43%. The company's profitability remains strong, with a gross profit margin of 45.96% and an operating income margin of 31.27%.
InvestingPro Tips highlight Apple's financial strength and market position. The company has maintained dividend payments for 13 consecutive years, demonstrating a commitment to shareholder returns. Additionally, Apple is recognized as a prominent player in the Technology Hardware, Storage & Peripherals industry, which aligns with its high market valuation.
However, investors should note that Apple is currently trading at a high P/E ratio of 34.44, which is above the peer average P/E of 28.2 mentioned in Maxim Group's analysis. This elevated valuation is further emphasized by an InvestingPro Tip indicating that Apple is trading at a high earnings multiple relative to its near-term earnings growth.
For those seeking a more comprehensive analysis, InvestingPro offers 13 additional tips that could provide valuable insights into Apple's investment potential.
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