Is Apple stock a buy now after JPM analyst raises price target?

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Updated on Sep 25, 2024

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Apple shares edged 0.90% lower on Thursday after surging to a new all-time high on Wednesday.
Analysts from JPMorgan and Citi are optimistic about the company’s near-term prospects.
JPM raised the price target on Thursday while Citi upped the quarterly earnings estimate on Wednesday.

Apple Inc. (NASDAQ:AAPL) stock received a significant boost on Wednesday and Thursday after analysts from leading investment banks issued positive comments. Citigroup analyst on Wednesday raised his expectations on AAPL’s Q2 earnings per share to $5.33, up from $5.18 and well above the consensus Street estimate of $5.17.

Suva cited solid end-market demand for PCs, smartphones, and wearables for higher earnings. As a result, Apple’s stock price surged 2.42% on Wednesday.

And on Thursday, JPM analysts followed Citi’s upbeat earnings upgrade by raising their price target to $175, up from $170. Apple stock traded at about $147.87 per share at the time of writing, implying an upside potential of about 18.3%.

Should you invest in AAPL stock in Q3 2021?

At the current price per share of about $147.87, AAPL trades at a trailing P/E ratio of 33.17. Its forward P/E ratio of 27.94 suggests little expectation of earnings growth in the next few years. Analysts have earnings growth expectations of 10.20% this year and just 3.11% next year.

However, the future average earnings growth of about 17.93% for each of the next five years is a source of positivity to investors looking to invest in the world’s largest company by market capitalization. Therefore, although Apple shares are trading at new all-time highs, there is still room for growth. JPM’s 12-month price target of $175 looks realistic given the momentum of the current bull-run.

Technical overview: my AAPL stock price prediction for the next three months

Technically, AAPL stock appears to have surged to overbought conditions in the 14-day RSI. However, with less than 1% pullback on Thursday, the bull-run seems to be far from over. Therefore, AAPL stock price could be poised for more upward movements in the coming weeks.

Investors can target extended gains at approximately $153.26 or higher at $160.00. The key support levels are $142.21 and $135.58.

Bottom line: the catalyst for buying AAPL shares now

Although Apple shares have rallied to new all-time highs, the company’s earnings could grow by a further 10% this year. Apple has traditionally outperformed earnings, which means the Y/Y growth could be higher than expected in the next quarter.

Therefore, Apple’s upside movement this year could continue in Q3, making it an attractive option for blue-chip stock investors.