Despite the hit Apple stock has taken this year, Wall Street says now is the time to buy shares of the iPhone maker, citing coming catalysts that could incite a rebound.
Shares of Apple are off to a tough start in 2024.
Apple shares have dropped 10% this year, lagging behind other members of the so-called Magnificent Seven group of stocks and the broader market. The S&P 500 is up about 8%.
That’s a stark decline from the 49% increase for Apple shares in 2023. There are a few reasons for the drop, including reports of weak iPhone sales in China, regulatory concerns, and a lack of clarity on the company’s plans for generative artificial intelligence.
Despite these concerns, most of Wall Street remains bullish. Of the 43 analysts surveyed by FactSet, 25 say the stock is a Buy, 13 say it’s a Hold, and five say it’s a Sell. The average price target from the analysts surveyed is $199.86, which implies a 16% increase from the stock’s closing price of $172.75 on Monday.
Evercore ISI analyst Amit Daryanani wrote in a research note on Sunday that he believes the recent Selloff of Apple shares is overdone, and there are some “distinct drivers that could unlock upside on the stock from here.”
Daryanani, who rates the stock as Outperform with a $220 price target, says he thinks Apple will incorporate generative AI into its iOS functionalities, which would revive optimism among investors.
Daryanani says Apple will go beyond the iPhone for its AI strategy, incorporating large language models used to train AI models on Macs and iPads too. Updating both the hardware and software of Apple’s devices would be a big deal since it would require users to purchase new devices.
Apple didn’t immediately respond to a Barron’s request for comment.
The analyst didn’t provide a timeline for when he expects AI announcements from Apple, but Wall Street anticipates getting an update from the company at the Worldwide Developers Conference scheduled for June.
Apple’s hardware has BofA Securities analyst Wamsi Mohan bullish as well. Mohan, who rates Apple shares buy with a $225 price target, cited Apple’s ability to retain market share in smartphones even if international struggles intensify. Apple’s strategy of lowering the price of older phones when new versions launch keeps new customers coming in and existing customers upgrading to the next best thing, he wrote in a note on Tuesday.
“Despite slower unit sales, Apple has been able to drive the mix of units to higher value, which in our opinion will continue as a long-term trend, thereby offsetting some of the potential unit weakness in China,” he said.
关注我们