Gene Munster puts together a new case for why Apple stock should be trading 50% higher

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Gene Munster, a former top Wall Street tech analyst turned venture capitalist, believes Apple‘s stock has reason to trade 50% higher than its Friday price.

“I want to try to quickly define what the right case [on Apple] would be,” Munster said on CNBC’s “Squawk Alley.”

Microsoft, Google [owned by Alphabet], and Facebook trade at a 31 to 35 times multiple. Apple has a developing consistency around their business that is comparable to those,” he argued.

Munster, co-founder of research-driven venture capital firm Loup Ventures, thinks Apple will earn about $15 per share in fiscal 2020, which is on the higher end of Wall Street expectations.

“If you put a 31 multiple on Apple, that’s $465. That’s about 50% upside,” he said, as shares early Friday afternoon were trading around $310 each, just a couple dollars off their all-time intraday highs, reached shortly after the open.

“I would just highlight that even though we don’t see those price targets moving up on Apple, I think there is a bigger trend towards a quality in multiples,” he added.

Apple currently has a multiple, or price-to-earnings ratio, around the mid-20s.

Munster’s argument Friday represents an evolution in his valuation assessment of Apple, a company which he covered as a longtime analyst at investment bank Piper Jaffray.

Last year, he had been making the case for Apple to trade more like a consumer staples company, Clorox and Coca-Cola, which tend to have lower multiples than tech stocks.

“We cannot live without Apple. We cannot live without those other staples,” Munster said in April, when he predicted a big two-year run to the upside for Apple.

Betting on Apple’s ascent has, so far, proved correct as shares have risen more than 50% since his April prediction and more than 100% in the past 12 months.

Apple is expected to release its latest quarterly earnings report after the bell on Jan. 28.

Expectations for Apple in 2020 are somewhat mixed as the Cupertino, California-based company prepares its entrance into the world of 5G technology.

Later this year, Apple is widely expected to release its first 5G-enabled iPhones, which could help accelerate what has been slumping sales growth for its signature product.

Services and wearable devices such as AirPods and the Apple Watch have more recently powered the company’s growth.

Munster thinks investors should temper their expectations around Apple and the next-generation wireless technology — for now, at least.

“Ultimately, this is a massive opportunity for Apple, huge play on 5G, but it’s going to take a while for networks to roll out coverage,” he said back in December.

However, Wedbush’s Dan Ives, for example, believes the 5G-compatible phones could drive a “transformational 5G super cycle” for Apple, and the analyst on Monday raised his price target accordingly to $400 per share.

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