The price target for Apple Inc.'s stock was raised 11% Wednesday to $155 from $140 at RBC Capital, which said growth in the technology giant's services business provided a path to higher market valuations. Analyst Amit Daryanani's new price target was 12% above the stock's closing price of $138.99 on Wednesday, and 6.4% above the average target of the 42 analysts surveyed by FactSet of $145.69. Daryanani outlook for its services business implies it will be a $48 billion to $50 billion business by fiscal 2020. That suggests either healthy growth in average revenue per unit (ARPU) or a "sizable" acquisition is coming. "[Apple's] services business has the potential to not only lift gross margins but to reduce cyclicality, further strengthen the Apple ecosystem and expand the range of strategic alternatives at management's hand," Daryanani wrote in a note to clients. He also sees capital allocation, cash repatriation and the upcoming iPhone 8 cycle as positive catalysts. The stock, which ticked up 0.2% in premarket trade, has rallied 20% year to date, while the SPDR Technology Select Sector ETF has climbed 9.7% and the Dow Jones Industrial Average has gained 5.4%.
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