According to Piper Jaffray, tech giant Apple will be returning to high single digits next year as demand for 5G iPhone heightens.
The firm reiterated an “overweight” rating on Apple this week and raised its price target from $290 a share to $305 a share.
Piper had polled U.S. iPhone users and found strong interest in upgrading to a 5G iPhone, even if it costs $1200.
The firm used only a 1% growth projection for iPhone sales in 2021 to get their price target but noted that the 5G iPhone could be a major upgrade that causes that prediction to be too low.
Separately, an analyst from Bernstein has said that Apple sold $6 billion worth of AirPods this year and should sell more than double in 2020.
Analyst Toni Sacconaghi has said growth could decelerate in 2021 as many iPhone users will have already purchased AirPods.
According to Sacconaghi, Apple could sell 85 million AirPods in 2020, generating about $15 billion in revenue. If sales of the wireless headphones grew at the same rate again in 2021, the product would become Apple’s third largest business.
Sacconaghi has a “market perform” rating on Apple shares.
“Given AirPods’ extraordinarily steep adoption curve and rapid saturation of the iPhone installed base, we see a dramatic deceleration in AirPods revenue growth by 2021 or 22, to single digit growth rates or possibly lower,” Sacconaghi wrote.
Shares of Apple are up over 77% this year so far.
Disclaimer: We have no position in Apple Inc. (NASDAQ: AAPL) and have not been compensated for this article.