Apple Stock: Wall Street Seems Unfazed
It seems like one year ago when Apple stock was climbing relentlessly. Except it has barely been a week.
Apple’s shares went from logging the fastest one-month price spike since 2009, in late August, to the sharpest four-day decline since 2008, in the early days of September. What does not seem to have changed much, at least so far, have been the opinions of Wall Street’s analysts about the stock.
Bears will be bears
Following the selloff and just ahead of Apple’s September product refresh event, a few analysts have come out with research notes and, in at least on case, even a price target bump.
The first to make his voice heard was Goldman Sach’s Rod Hall, a rare analyst on Wall Street to have a sell rating on the stock. He maintained his bearish views on Apple, taking advantage of share price weakness to do a quick victory lap. He maintains his opinion that:
- the iPhone is a very tough act to follow;
- services and wearables are not likely to be large enough to return the company to growth;
- other tech giants like Amazon and Microsoft are delivering the numbers and yet are valued at about the same multiple as Apple.
Bulls will be bulls
A couple of days later, the bulls showed up for the party.
Wedbush’s Dan Ives has been excited about the 5G supercycle for many months now. His channel checks indicate a propensity of current iPhone owners to upgrade their devices between late 2020 and 2021, particularly in Greater China – a market that has been a thorn in Apple’s side since 2015.
Finally, Baird’s William Power not only doubled down on his bullishness, but increased his price target by 22%. At his target level, Apple would trade again at last week’s prices. The analyst justified optimism on the back of “the strength of the eco-system including further iPhone share gains, strong wearables growth, and potential 5G upside” – conclusions drawn from his company’s recent consumer survey.
The Apple Maven’s take
The good news is that Apple’s recent correction, while sharp and nearly impossible to time properly, has done little to change analysts’ predominantly bullish views on the stock. Therefore, continued support from Wall Street may help to stabilize shares for now.
However, I continue to find it too early to draw conclusions about Apple’s recent decline. I remain a bull myself, but think that achieving portfolio balance is perhaps more important than trying to be right about future price movements.
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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)