Apple Stock Beats the Market Ahead of the iPhone Launch. The Street Remains Bullish.

“We suspect interest for the iPhone 13 will pick-up dramatically,” writes one analyst.

Sean Gallup/Getty Images

Apple shares have been on fire heading into next week’s widely anticipated launch of the next generation of iPhones.

For months now, analysts have been telling investors to buy the stock on the theory that Apple (ticker: AAPL) generally outperforms ahead of the annual debut of new iPhones. That dynamic has largely played out. Since the end of June, Apple shares have appreciated 13%, more than twice the return on the Nasdaq Composite.  They are down 0.2%, at $154.84, in recent trading. 

The question is what happens next. And that will depend on the consumer reception to next week’s round of new devices.

Piper Sandler analyst Harsh Kumar on Thursday repeated his Overweight rating on Apple, upping his target price on the stock to $175 from $165. Kumar writes in a research note that a recent survey of 1,000 Americans found that only 6% plan to buy or upgrade to the iPhone 13 in the coming months, a result he found a little surprising in its lack of enthusiasm. But he adds that discussions with carriers find that iPhone 12 demand remains strong—and he thinks the new phones will extend the momentum.

“Once pricing and features are announced,” he writes, “we suspect interest for the iPhone 13 will pick-up dramatically, [and] again as people continue to move to 5G.”

The call follows a similar move on Wednesday from Baird analyst William Power, who boosted his price target on the stock to $170 from $160.

Expectations are widespread that the new round of phones will be only incrementally improved from the iPhone 12. Reports suggest that the new phones will have faster chips and some camera improvements, but with identical form factors to the iPhone 12. Wedbush analyst Daniel Ives wrote in a research note earlier this week that supply chain builds for the new phones are running at about 90 million, a level he says “speaks to an increased confidence” at Apple that the 5G product cycle will extend well into 2022.

Apple will unveil the new phones in a virtual event next Tuesday.

Write to Eric J. Savitz at eric.savitz@barrons.com