Apple stock price target raised to $290 from $260 at Evercore ISI

Evercore ISI raised Apple's price target to $290, forecasting a strong hardware-driven iPhone refresh cycle to boost average selling prices by 7% and highlighting robust services growth, though InvestingPro suggests the stock may be overvalued. While BofA reiterated a Buy rating on strong iPhone 17 demand, UBS maintained a Neutral stance, citing mixed demand across models and weak interest in the iPhone Air. Separately, Apple is reportedly in early discussions with Intel for chip collaboration and is challenging the EU's Digital Markets Act.

Analysis

Apple's outlook is supported by a strong hardware-focused iPhone refresh cycle, according to an Evercore ISI consumer survey that prompted a price target increase to $290. The survey indicates robust consumer intent to upgrade, driven by hardware features like camera and battery, rather than AI. This demand is skewed towards premium models, with 56% of respondents planning to purchase the iPhone 17 Pro or Pro Max, exceeding the 50% historical average. This trend, combined with a preference for higher memory configurations, is projected to lift average selling prices (ASPs) by approximately 7% year-over-year. Further bolstering the bull case is notable strength in the services segment, where Apple Pay usage grew by 7 percentage points following recent legal resolutions. However, this optimism is tempered by several factors. Analyst sentiment is mixed, with UBS maintaining a Neutral rating and a $220 price target due to uneven demand across the product line. Specifically, survey data reveals weak interest in the new iPhone Air model at just 9%, suggesting a potential soft spot in the portfolio. Furthermore, with the stock trading near its 52-week high at a P/E of 38.77, an InvestingPro analysis flags potential overvaluation. Other strategic and regulatory factors include early-stage chip collaboration talks with Intel, viewed by some as politically motivated, and Apple's ongoing challenge to the EU's Digital Markets Act.

Key Decisions for Investors

• Investors should weigh the bullish catalyst of a hardware-driven iPhone cycle, which Evercore ISI projects could drive a 7% ASP increase, against the stock's high valuation and P/E ratio of 38.77.
• Monitor sell-through data closely for demand bifurcation, as strong performance in premium iPhone models may be partially offset by the reported weakness in the new iPhone Air.
• The positive momentum in the services segment, particularly the growth in Apple Pay, provides a supportive tailwind that should be factored into growth expectations.
• Keep a close watch on regulatory developments related to the EU's Digital Markets Act and any concrete outcomes from the reported chip collaboration discussions with Intel, as both represent material long-term risk and strategic factors.