As reported by CNBC, Citi Research has raised its Apple stock price target from $230 to $265, predicting the smartphone maker will report earnings per share above expectations next year.
“We increase our financial model primarily due to higher ASPs [average selling price] & stronger gross margins given the consumer preference for higher memory configurations [the models with an 512GB drive] of iPhones coupled with the new falling memory prices,” the firm’s analyst Jim Suva says. “”Our checks suggest solid demand for iPhone XS & XS MAX and importantly most consumers opting for higher memory iPhone configurations.”
The analyst said memory represents 10% to 15% of the component costs in base iPhone models. But when a consumer buys a higher memory configuration that costs $100 more, it costs Apple only an incremental $20, Suva says. He noted flash memory prices are down 18% since March.
