Top tech analyst says Apple's stock hasn't been this 'expensive' in a decade

Published Mon, Jan 6 20201:41 PM ESTUpdated Mon, Jan 6 20204:03 PM EST

Apple's stock hasn't been this expensive in a decade, top-rated technology analyst Toni Sacconaghi said. The iPhone maker is trading at its highest multiple in ten years, which will limit upside from here, he added. "We struggle to see material upside from here, given that Apple is now the most expensive it's been since 2010," said A.B. Bernstein's IT hardware analyst Toni Sacconaghi in a note to clients on Monday. Shares of Apple rose nearly 90% in 2019, including a 45% climb in the last four months, where the stock appeared to gain every single day, Sacconaghi noted. The 2019 iPhone cycle ended up being better-than-expected, tensions in China improved and Airpod sales beat estimates, all attributing to some of the stocks gains. But most of the stock's "euphoric" rally is in anticipation of the 5G iPhone cycle, expected to launch in 2020. With the 5G cycle already priced in, the stock doesn't have much upside from here, said Sacconaghi. "The real story here is one of multiple expansion, as investors became increasingly willing to embrace the services story, learned to love the buyback (close to $20B per quarter), and most importantly, began to look past FY19 and even FY20, in anticipation of a potentially strong FY21 cycle with the 5G iPhone," said Sacconaghi. Apple is trading at 22 times Bernstein's 2020 earnings estimates, its highest multiple since the days of the iPhone 4 a decade ago, the firm noted. "We blinked, and we missed it," said Sacconaghi, who raised his price target on Apple to $300 per share on Monday, as the stock blew past the previous $250 per share price target. Bernstein has a market perform rating on Apple. Sacconaghi is often the top tech analyst in the annual rankings from Institutional Investor magazine. His tech stock picks have an average one-year return of 21%, according to TipRanks, which places him among the best on Wall Street. Deutsche Bank also said Apple "unlikely to come close to repeating last year's returns." Shares of Apple rose 0.8% to $299.80 per share on Monday. — with reporting from CNBC's Michael Bloom.

Apple CEO Tim Cook delivers the keynote address during the 2019 Apple Worldwide Developer Conference (WWDC) at the San Jose Convention Center on June 03, 2019 in San Jose, California.

Justin Sullivan | Getty Images

Apple's stock hasn't been this expensive in a decade, top-rated technology analyst Toni Sacconaghi said.

The iPhone maker is trading at its highest multiple in ten years, which will limit upside from here, he added.

"We struggle to see material upside from here, given that Apple is now the most expensive it's been since 2010," said A.B. Bernstein's IT hardware analyst Toni Sacconaghi in a note to clients on Monday.

More In Pro News and Analysis

Morgan Stanley names this steel stock a top pick as it undergoes a transformation

Pia Singh12 min ago