According to a group of UBS analysts led by David Vogt, Apple’s current share price does not reflect the tech giant’s long-term ambitions for autonomous vehicles.
Analysts are forecasting a price of $ 142 for Apple, up about 12% from current levels. In a recent note, analysts said their price target reflects Apple’s self-driving car capabilities.
Apple has been developing autonomous vehicle technology for years but has never confirmed it is working on a car. In a recent interview, CEO Tim Cook hinted that Apple is working on an electric car project, but said many of Apple’s ideas “will never see the light of day.”
But UBS noted that there are growing signs that Apple is working on autonomous vehicle technology. For example, according to analysts, Apple recently received a patent for VoxelNet, a technology that can be used in antivirus software.
“While Apple has yet to make an official announcement, we believe that the AV patent series demonstrates once again that Apple is committing significant resources to projects that have ‘optionality’ but are not reflected in stocks,” they said.
UBS also noted that Apple’s Voxel patent file contains a brief mention that the technology includes processors that mimic the turn of a car, another hint that the company is diving into self-driving cars.
“While the application can have many uses, we find the use of the word ‘vehicle’ in the patent application, along with previous research published by Apple, as important clues to the company’s commercial intent,” UBS said.
Apple was up 1.6% on Thursday, although stocks have dropped about 2.5% since the start of the year as investors took in profits from the tech giants that dominated 2020.
“Apple is currently trading at a P / E of 28x, which is the average for the year,” UBS said. “However, we believe that the sum of parts structure (SOTP) is more appropriate in the future, given the choice of vehicles. Thus, our $ 142 target price reflects not only the ~ $ 128 Apple Core price, but also the weighted likelihood of selling Apple vehicles ($ 14 per share) in our SOTP analysis. ”