Apple shares rally after J.P. Morgan initiates coverage and predicts stock to hit new highs

Shares of iPhone giant Apple Inc (NASDAQ:AAPL) surged on Thursday after top investment bank J.P. Morgan initiated coverage of the company for the first time and predicted the stock could notch fresh all-time highs in the coming days based mainly on strong growth in its services business.

“While Apple’s leadership position in the premium smartphone market is well understood by investors, we still see considerable upside to the stock,” analyst Samik Chatterjee said in a research note to clients.

The bank intiated with an overweight rating and a price target at $272 per share, representing about a 23% upside to the Wednesday close of $220.42. Apple became the first US company to be valued at $1 trillion last month.

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Apple stock was trading 2.27% higher at $225.43, having hit a session peak at $225.94. The all-time high for Apple is currently at $229.67.

Chatterjee said Apple is ”transforming from a hardware company to a services company faster than investors had expected, which is driving financial and valuation upside.”

“We expect increasing appreciation of acceleration in growth, along with greater visibility into earnings and cash flow with increasing mix of Services,” the analyst added.

The services business includes its App Store, Apple Music and Apple Pay offerings.

Apple is based in Cupertino, California.

Story by ProactiveInvestors