Apple AAPL shares rose after Deutsche Bank analyst Jeriel Ong raised his target on the technology titan’s share price to $400 from $380 and affirmed his buy rating.
He does have some reservations about the stock’s recent surge - 44% in the past three months - but he believes in the Cupertino, Calif., company's fundamentals.
“We do have some worry that the stock price has overreacted to the positive data points over the past two months, and the rough mental framework we've articulated certainly gives us some pause,” Ong wrote in a commentary.
He sees several risks:
· Lower spending in the second half of the year from smaller wallets and higher unemployment;
· A more prolonged second wave of covid-19, which would cause continued reversal of store openings and tightening of spending;
· iPhone delays hurting the stock price, which investors appear to largely be looking through now.
But “despite our worries, we do reiterate our confidence that AAPL can work from present levels, notwithstanding" the stock's 70% rise from our upgrade in late March, Ong said.
“Long-term, we see investors building more confidence in four drivers of the stock (iPhone, Air Pods, services, and [Golden Master] mix shift) as the market continues to stabilize,” he said.
“While we see the risks … ultimately we continue to believe the reward/positive catalysts outweigh the risks, at least at this point in time.”
Apple shares recently traded at $379.47, up 1.8%. The stock has leaped 82% over the past 12 months, compared with 6% for the S&P 500.