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Technology Giant Apple Targeting Car Production by 2024, Shares Gain About 4%

By:
Vivek Kumar
Updated: Apr 17, 2022, 14:37 UTC

California-based technology giant Apple Inc is planning a production of passenger vehicles by 2024 with its own radically new battery design, according to a Reuters report which cited undisclosed sources, sending its shares up about 3% in pre-market trading on Tuesday.

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California-based technology giant Apple Inc is planning a production of passenger vehicles by 2024 with its own radically new battery design, according to a Reuters report which cited undisclosed sources, sending its shares up about 4% in pre-market trading on Tuesday.

Two people familiar with this plan told Reuters that the iPhone maker has planned to tap outside partners for elements of the system, including lidar sensors, which support self-driving cars get a three-dimensional view of the road.

“It has long been the auto and tech hardware teams’ collective working assumption that Apple will, one day, design and engineer a car. Apple possesses the key ingredients that we believe are critical to be successful in the future auto industry. From a Tesla perspective, we have long felt that tech players like Apple (working with manufacturing partners such as FoxConn) represent far more formidable competition than the established/legacy OEMs,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Large tech firms want access to the auto industry due to its large TAM size, as well as the enormous amount of time spent in cars. From our Apple team… they see Project Titan (Apple Car) as a long-term project where, similar to other markets like mobile and wearables, Apple can disrupt through vertical integration. The EV arms race is still in the early stages and the battery technology is not mature,” Jonas added.

At the time of writing, Apple shares traded about 4% higher at $133.19; the stock is up about 80% so far this year.

Apple Stock Price Forecast

Thirty analysts who offered stock ratings for Apple in the last three months forecast the average price in 12 months at $131.88 with a high forecast of $160.00 and a low forecast of $75.00. The average price target represents a 2.85% increase from the last price of $128.23. From those 30 equity analysts, 23 rated “Buy”, six rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $144 with a high of $201 under a bull scenario and $77 under the worst-case scenario. The firm currently has an “Overweight” rating on the technology company’s stock.

Several other analysts have also recently commented on the stock. Apple had its price objective raised by analysts at Citigroup to $150 from $125. Oppenheimer reiterated an “outperform” rating and set a $125 price target. Royal Bank of Canada raised their target price to $132 from $111 and gave the stock an “outperform” rating. Loop Capital upgraded shares to a “buy” rating from a “hold” and raised their target price to $131 from $110.

Analyst Comments

“Apple has the world’s most valuable technology platform with over 1.5 billion active devices, and is entering FY21 with its strongest portfolio of Products and Services in years, 80% of which have been refreshed in the last 12 months,” said Katy Huberty, equity analyst at Morgan Stanley.

“We see multiple tailwinds to drive a re-rating over the next 12 months including 1) accelerating adoption of 5G smartphones, 2) work, learn and play from home demand, 3) increasing penetration of high margin services, and 4) strong cash returns. Longer-term investments in augmented reality, payments health, autos and home can help sustain growth as Apple captures more of its users time and wallet share,” Morgan Stanley’s Huberty added.

About the Author

Vivek has over five years of experience in working for the financial market as a strategist and economist.

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