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Investing.com - BofA Securities raised its price target on Apple (NASDAQ:AAPL) to $250.00 from $240.00 on Thursday, while maintaining a Buy rating on the stock. The tech giant, currently valued at $3.16 trillion, trades at a P/E ratio of 32.4x. According to InvestingPro analysis, Apple appears overvalued at current levels, though analysts maintain positive outlook with targets ranging from $175 to $300.
The firm cited Apple’s increased investment in the United States, which makes it "increasingly likely" that several Apple products will be exempt from tariffs. BofA Securities believes this exemption could help Apple gain smartphone market share in the U.S. if competitors remain subject to tariffs while iPhones are exempt. As a prominent player in the Technology Hardware industry, Apple has demonstrated strong financial health, earning a "GOOD" overall score from InvestingPro’s comprehensive analysis.
The investment bank had previously expected approximately 200 basis points of incremental headwinds to gross margins from a potential 20% tariff on Apple products. With possible exemptions, BofA Securities now sees potential upside to estimates of 100-200 basis points of gross margin improvement, potentially putting Apple on track to approach 50% gross margins for the overall company over time. Currently, Apple maintains a healthy gross profit margin of 46.68%, according to recent financial data.
BofA Securities also noted that the December quarter could see "material FX driven GM tailwinds" in addition to the potential tariff relief. The firm’s increased confidence in Apple achieving over $8 in earnings per share for calendar year 2026 drives the new price target.
The investment bank reiterated its Buy rating, citing Apple’s stable cash flows, earnings resiliency, and strong capital return program. InvestingPro data reveals that management has been aggressively buying back shares, and the company has maintained dividend payments for 14 consecutive years. For deeper insights into Apple’s valuation and financial health metrics, including 13 additional exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Apple has announced a significant increase in its U.S. investment, pledging an additional $100 billion, which raises its total commitment to $600 billion over the next four years. This expansion includes substantial agreements with suppliers, such as a $2.5 billion deal with Corning (NYSE:GLW) and a new multiyear arrangement with Coherent (NYSE:COHR). As a result, Apple has reportedly secured a tariff exemption on imported goods to the United States, as noted by UBS, which maintains a Neutral rating with a $220 price target. Meanwhile, Evercore ISI and Wedbush have both reiterated their positive outlooks on Apple, with Evercore maintaining an Outperform rating and a $250 price target, and Wedbush holding an Outperform rating with a $270 price target. Wells Fargo (NYSE:WFC) also reaffirmed its Overweight rating, setting a $245 price target. However, potential challenges loom as President Trump’s tariff threat on India could increase Apple’s annual costs by $10 billion, potentially reducing operating income by 7%, according to Deepwater Asset Management. This situation arises from Apple’s shift of iPhone manufacturing from China to India to mitigate previous tariff impacts.
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