Apple‘s (AAPL) App Store could provide upside to the consumer electronics giant’s September-quarter results, a Wall Street analyst says. Apple stock rose on Tuesday.
Sensor Tower data points to App Store sales growth of 19% for the September quarter, Evercore ISI analyst Amit Daryanani said in a note to clients late Monday. That’s despite recent actions taken by the Chinese government to limit how much time young people can play video games.
Games are the cash cow for the App Store, which takes a 30% cut of sales as a distribution fee. The Wall Street Journal recently estimated that Apple generated $8.5 billion in operating profits from games in its fiscal year 2019.
“The App Store continues to perform well and the 19% growth for the quarter should be sufficient to deliver some upside to Services estimates,” Daryanani said. He maintained his outperform rating on Apple stock with a price target of 180.
Apple Stock Called ‘High Conviction Stock’
On the stock market today, Apple stock rose 1.4% to close at 141.11.
Cupertino, Calif.-based Apple plans to report its September-quarter results on Oct. 28.
Elsewhere on Wall Street, investment bank UBS named Apple stock as one of 15 “high conviction stocks.” These stocks have strong pricing power as cost pressure increases, the firm said.
UBS analyst David Vogt said he expects strong iPhone sales for the next three years. Smartphone sales will provide a halo effect for Apple’s other products and services, he said. Also, Vogt expects Apple to enter the electric vehicle market at some point.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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