Apple Inc. (NASDAQ:AAPL) on Friday received a big price target bump from a prominent Wall Street firm, which cited expected benefits from a lower corporate tax rate.
Maxim Group lifted their price target on AAPL from $204 from $193, citing Washington’s new tax plan, which will tax most U.S. corporations less and also allow for much smaller penalties on repatriated cash that’s currently being held in foreign accounts.
The firm also boosted its fiscal Q1 earnings estimates slightly above the high-end of the company’s own guidance, citing iPhone supply improvements at a better-than-expected rate. While Maxim cut its Q2 revenue outlook to a profile more similar to the iPhone 6 launch a couple years back, their estimates are still above the Wall Street consensus.
The analyst continues to expect erosion of the iPhone X price premium in in 2019, which led to a more normalized valuation. However, when reducing the company’s overall tax rate to 19% from 25%, the stock remains a buy with the heightened price target, it said.
Apple Inc. shares closed at $177.09 on Friday, up $1.81 (+1.03%). Year-to-date, AAPL has gained 4.64%, versus a 4.14% rise in the benchmark S&P 500 index during the same period.