Apple (AAPL, Financial) is set for steady double-digit earnings growth over the next five years, according to Evercore ISI, which sees the company benefiting from strong margins, operating leverage, and share buybacks.
While many investors focus on iPhone sales, Apple's ability to grow earnings per share and free cash flow consistently is often overlooked, analyst Amit Daryanani wrote in a note to clients. He highlighted Apple's advantage in artificial intelligence monetization, noting that the company doesn't need to invest heavily in GPUs to profit from AI.
Daryanani expects Apple to reach $11.50 in earnings per share by 2029, up from a projected $7.33 this year, citing its steady performance and expanding services business. He maintained an Outperform rating on the stock and raised his price target from $260 to $275.
Beyond services, Apple's growth drivers include increasing iPhone market share, potential AI revenue streams, and deeper monetization of its healthcare-related products, such as AirPods. Daryanani also noted that Apple's wearables segment could see stronger-than-expected growth if the company capitalizes on advancements in health tech.
Apple shares were little changed in premarket trading Tuesday.
