Investors are underestimating the ability of Apple‘s (NASDAQ:AAPL) wearables business to fuel its growth.
So says Citi analyst Jim Suva. On Monday, Suva reiterated his buy rating on Apple’s shares and lifted his price forecast from $112.50 to $125. His new target represents potential rewards for shareholders of approximately 13% from the stock’s current price near $110.
Suva says Apple’s wearables sales will push the company’s stock higher as people spend more on tech gear with health-tracking features. “Apple continues to make inroads into healthcare devices market which we view as a positive move for attracting and engaging their users to their products, given the importance of such features by individuals,” Suva said.
Moreover, despite reported delays, Suva predicts Apple will launch its much-awaited iPhone 12 in time for the holiday shopping season.
Is Apple’s stock price headed to $125?
The iPhone 12 is expected to be the tech titan’s first 5G-enabled smartphone. The fifth-generation wireless technology could help to ignite a massive upgrade cycle among current iPhone owners, in addition to bringing new customers into Apple’s burgeoning ecosystem of devices and services.
Wearables, led by the Apple Watch, are likely to become an increasingly important part of this ecosystem, as Suva notes. The coronavirus pandemic has placed health front and center in the minds of people around the world, and Apple has wisely ramped up its health-focused technologies in its devices.
This all bodes well for strong sales of Apple’s iPhones, Watches, and services, which could easily drive its stock above $125 in the months ahead.