Apple will perform well on the stock market in 2020, but the Cupertino-based company is unlikely to match the significant spike in share price logged last year, according to financial analysts.
Apple delivered its best annual return in a decade in 2019 as robust sales for the iPhone 11 and growth in wearables and services helped its stock to soar 86% during the 12 months to 31st December.
Deutsche Bank analysts expect Apple to be strong again this year but believe that concerns about demand for the upcoming iPhone and potential tariffs from the long-running US-China trade battle could prevent it from running up another record in 2020.
Deutsche Bank said that investor demands are high as the new year gets underway but noted that the current sky-high valuation represents “a lot of goodness” and that performance is unlikely to outstrip expectations.
Apple fans are unlikely to dip into the stock market to buy shares, but the forecast does offer a useful overview of what to expect from the company during the coming months.
Deutsche Bank believes that Apple’s “fundamentals” are strong after several of its product lines saw healthy sales during the festive period.
The arrival of a next-gen 5G iPhone, which was recently rumoured to be coming a couple of months after a standard iPhone 12, is also expected to boost sales.
Analysts also believe that there will be fervent demand for Apple’s AirPods during the whole year following the recent release of a premium Pro model with active noise cancellation and customisable options.
While Deutsche Bank is slightly cautious, Needham analysts are more optimistic and expect the company’s unique brand image and “gatekeeper” status to drive stock growth again in 2019.
However, it did note that its recent outperformance against the 500 largest companies listed on US stock exchanges does make another year of incredible returns unlikely.