Will the iPhone Make Apple the First $1 Trillion Company? Not in the Next Year, Says Wall Street

There’s a lot to be excited about on Wall Street as Apple unveils its next generation iPhone Tuesday.

Apple’s stock has soared some 53% over the past year largely thanks to investors betting that the 10th anniversary iPhone will become a winner. And with Tuesday’s expected iPhone unveiling, comes titters of Apple potentially becoming the world’s very first $ 1 trillion company. For comparison, that would make Apple worth about 5% of the U.S.’s gross domestic production in 2016, or in another measurement, over four Walmarts.

But even as Wall Street serenades the company with high expectations for iPhone sales in the holiday season, they aren’t so euphoric as to say the world’s largest company by market capitalization could hit that 13-digit figure any time soon.

In fact, even while Wall Street analysts say $ 815 billion Apple could become the world’s first trillion-dollar company with help from the new iPhone, with RBC analyst Amit Daryanani predicting the threshold-break in the next 12 to 18 months, the majority of Wall Street isn’t willing to put their foot down on that prediction just yet.

To hit $ 1 trillion, Apple’s stock needs to hit $ 194. But according to some 52 analysts polled by Bloomberg as of Monday, analyst consensus has placed $ 175.46 as the 12-month price target on the stock. The 12-month price target can usually be described the price at which analysts predict an investor will have achieved optimum gains, and should thereby exit their position.

Based that target price, Wall Street expects Apple to reach a market capitalization of about $ 906 billion over the next 12 months. Certainly a new high for any company, but also not as exciting as $ 1 trillion.

While it’s possible analysts are simply waiting to increase their stock targets after they’ve seen the event Tuesday, it’s also highly likely that they’ve already priced in the iPhone 8. Apple product launches have long been plagued by leaks, priming investors on what to expect. With no surprises or even hyped up expectations leading up to an event, shares of Apple have fallen more often than they have risen on the day of each iPhone launch.

That’s not to say investors should expect Apple to hit $ 908 billion in market cap over the next 12 months. Analyst estimates also aren’t exactly a perfect way of predicting a stock’s returns, as a 2012 paper from researchers at Boston College, Temple University, and Florida International University has shown. They found that between 2000 and 2009, the stock prices hit or beat the 12-month price targets about 64% of the time. Meanwhile, the implied returns from those 12-month price targets overshot actual returns from the same period by an average of 15%.

“In sum, our sample analysts do exhibit some persistent abilities in forecasting stock prices, but these abilities are economically weak,” those researchers concluded.

While pinpointing Apple’s valuation on a yet-to-be released iPhone might not be easy, larger themes troubling and backing the company are more apparent. Sales in China for Apple have been falling, with the company now commanding a sixth of the nation’s smartphone market. At one point, Apple had relied on China to show the company’s growth. But the rumored $ 1,000 price tag on the new iPhone has reportedly put some consumers in the Asian nation off. Meanwhile, as the global smartphone market grows saturated, Apple has not remained a sitting duck. The company has been pushing to expand its services business, a segment that includes iTunes song purchases, Apple Watch, and Apple TV. That segment has been particularly strong in recent quarters, with revenue accounting for 16% of Apple’s revenue in the fiscal third quarter of 2017, up from $ 14% a year ago.

So as to when and if Apple hits $ 1 trillion, there is no short cut. Investors really will just have to wait and see.