The bull case on Apple that could take it 70% higher from here, according to Evercore ISI

Published Fri, Mar 25 20222:34 PM EDTUpdated Fri, Mar 25 20223:00 PM EDT

Shares for Apple can soar 70% higher from here on the strength of key upcoming "multi-billion opportunities," according to Evercore ISI. Analyst Amit Daryanani sees an upside scenario in which shares can hit $300, saying in a Thursday note that the bull case is supported by continued strong iPhone sales, services outperformance and an expansion of gross margins from current levels. The firm gave Apple an outperform rating. Some unannounced products would also help the tech giant hit the upside scenario, said analysts. They see augmented reality and virtual reality (AR/VR) and other services as "multi-billion opportunities" that Apple has yet to fully scale. "We see several moonshot opportunities that could enable and drive not just sizable EPS upside but also importantly could help drive a higher valuation," read the note. "While its always difficult to stack up the growth vectors, we think they could be a host of opportunities." AR/VR potential and more Building out an AR/VR ecosystem could add $38 billion in sales, the note said. Although it's difficult to determine the happenings in Apple's research and development labs, analysts say they feel "confident" that AR/VR products will "likely be the next major hardware product" for Apple. Evercore analysts are expecting a formal launch of an AR/VR product later this year, which could cause the stock price to surge. AR glasses and VR headsets that are voice-controlled using Siri would help Apple boost its wearables business. The products could help Apple add 20 to 40 cents to per-share earnings, the firm found. An Apple Car could add $40 billion in sales, should the automobile ever reach production, analysts said. Evercore believes Apple's entry into the market would be "cautious," targeting roughly 100,000 units in its first year with plans to "rapidly expand capacity" if it feels there's enough market demand. An Apple Car could add 30 to 60 cents to per-share earnings, the note said. Advertising and payments growth Daryanani believes Apple's advertising and payments businesses are "underappreciated" by investors, arguing they'll grow to $20 billion and $11 billion within five years, respectively. Advertising in Apple products has been relegated to promoting apps in the app store, but scaling out the business would contribute 50 to 80 cents to per-share earnings, or 5% to 8%, Evercore found. Expanding payment options, including its "buy now, pay later" feature, would also help Apple add 30 to 50 cents to per-share earnings. Health care remains the "biggest potential source of growth," though analysts said that Apple's focus is unclear. Evercore estimates the sector could add 20 to 40 cents to per-share earnings. To be sure, Apple still faces challenges ahead, including potential regulatory risks that could affect the future of the app store. Further, Apple shares have been in the red this year, retreating about 1.6% over supply chain concerns. Still, the company has outperformed the tech-heavy Nasdaq, which has fallen more than 9% over the same time period. In January, Apple CEO Tim Cook said supply chain issues would improve , soothing investor fears. The iPhone maker also reported a solid earnings report, beating consensus estimates for sales. Overall revenue was also up 11% annually.

Shares for Apple can soar 70% higher from here on the strength of key upcoming "multi-billion opportunities," according to Evercore ISI.