rising stock is at an "unreasonable" level, an analyst wrote Monday.
The Apple stock (AAPL), up 44% in 2019 through Friday's close, was up 0.4% in recent trading at $ 228.02 when the S&P 500 was slightly down. Nomura Instinet analyst Jeffrey Kvaal reiterated a neutral rating on the stock on Monday, raising his price target from $ 185 to $ 205, below FactSet's $ 226 average.
The shares are trading at about 17 times Nomura's latest estimate of $ 13 tax revenue per share, which is above FactSet's current average of $ 12.68, according to Kvaal.
"Apple's multiple is on a post-iPhone 6 high, which we consider unreasonable, given the slowing growth," he wrote. A more appropriate multiple is 15 times, according to Kvaal, who said if the current multiple holds the shares, it would be worth $ 235, about 3% above Friday's close.
Kvaal believes the demand for the company's latest phones is solid, which – along with strong related revenue from wearables, services and games – could mean that investor focus will shift to the next device cycle when 5G network technology can attract new buyers and upgrades.
But there are reasons to be on guard, he wrote. "Conventional wisdom has 5G will drive strong replacement sales for the iPhone 12," according to Kvaal. “We are not overly fascinated, given the pricing of units / services, historical precedent and limited consumer benefit. 5G iPhones are likely to cost more, and we don't think consumers are likely to pay around $ 200 more for 5G when 4G is enough. "
Meanwhile, not all analysts are convinced of short-term strength for Apple, with Barron's writing on Friday that global financial issues could impact the company's December results.