Source: Finance Association
① Bank of America believes that Apple has a “rich catalyst path and defensive cash flow”; ② the bank rated Apple stock as a buy, with a target price of $225; ③ Bank of America listed Apple as the “2024 Preferred Stock” in its latest report.
As Apple is about to release its latest earnings report, Bank of America (Bank of America) listed it as the “2024 Preferred Stock” and said it is optimistic about this performance report and the company's long-term prospects.
Bank of America analyst Wamsi Mohan wrote in the latest report that Apple has a “rich catalyst path and defensive cash flow,” and he rated the stock as a buy, with a target price of $225.
Apple is scheduled to release its second-fiscal quarter results report next week. Bank of America is generally optimistic about Apple's prospects, believing that “service revenue growth and profit margins will remain strong.” However, the bank also warned that “the demand environment is weak, and the lower guidance for the second quarter may lead to a correction in stock prices.”
Apple shares closed up 0.51% on Monday. The stock has just broken out of its lowest closing point in about a year, falling 6.5% in the previous five trading days, and the market value evaporated by nearly $180 billion. Apple's stock price has dropped a total of about 11% since this year, making it one of the worst performing companies among large technology companies.
Concerns about growth, particularly the increase in iPhone sales in key Chinese markets, as well as regulatory pressure and a lack of strategies around artificial intelligence (AI), are putting pressure on Apple's stock price.
Bank of America's optimism is the exact opposite of Morgan Stanley analyst Erik Woodring's. He cut Apple's target share price from $220 to $210 on Monday, and expects Apple to give a disappointing “answer” when it releases earnings reports.
“Considering Apple's upcoming press conference focusing on artificial intelligence, I recommend buying after the latest earnings report causes a pullback.” he wrote.
Bloomberg Intelligence (Bloomberg Intelligence) is also cautious. The agency wrote that considering weak demand for iPhones in China, Apple “may cut iPhone sales expectations for the third fiscal quarter by 2%.” Analyst Anurag Rana added: “This could prolong the company's slow growth and negative sentiment.”
Although Apple is still one of the “big seven tech giants,” only 55% of analysts tracked by the media recommended buying the stock, compared to the bullish share of Microsoft, Nvidia, Google's parent company Alphabet Inc., Amazon, and Meta Platforms Inc., close to or above 85%.
However, some strategists believe the stock is attractive after this year's sharp decline. US financial services company Cantor Fitzgerald (Cantor Fitzgerald) recently stated that the valuation “has now shrunk to a much more reasonable level.”
“As inflation intensifies and yields rise, we believe this environment will attract capital flows to stocks that are less sensitive to interest rates, and given Apple's poor performance, we believe it will be a major beneficiary of this rotation.” The company added.
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