Apple: Apple has been named a top pick for 2024 by BofA ahead of major earnings results.
Analyst Wamsi Mohan, who has a Buy rating and $225 price target, said the company has a “rich catalyst path with defensive cash flow.”
Apple’s second-quarter results are scheduled to be released next week, and BofA is generally positive about the outlook, saying “services revenue growth and margins will remain strong.” However, he warned, “The demand environment is weak and the lowering of the F2Q guideline may have an impact on the stock price decline.”
Apple shares rose 1.22% to $167.02 on Monday. The stock closed at its lowest in nearly a year, falling 6.5% in five days, wiping nearly $180 billion from its market capitalization. The stock has fallen 14% this year, making it one of the weakest performers among megacap technology companies.
agencyThe stock has been pressured by concerns about the iPhone’s growth, particularly in the key Chinese market, regulatory pressures and a lack of strategy surrounding artificial intelligence. Morgan Stanley lowered its price target on Apple’s stock from $220 to $210 on Monday, predicting a disappointing outlook. “This appears to be priced in, but it is a tricky setup in today’s volatile markets,” analyst Eric Woodring wrote. The company recommends buying on earnings weakness considering the upcoming AI-focused Apple event. Bloomberg Intelligence also cautiously wrote that given weak iPhone demand in China, Apple is “likely to raise device sales guidance for the fiscal third quarter below consensus.” “Down 2%.” “This could prolong the company’s slow growth and negative sentiment,” added analyst Anurag Rana. Apple remains the dominant stock in the benchmark stock index, accounting for 5.7% of the S&P 500, but Wall Street remains quite skeptical. Only 55% of analysts tracked by Bloomberg recommend buying the stock, while Microsoft Corp., Nvidia Corp., Alphabet Inc. and Amazon.com Inc. and Meta Platforms Inc., the bullish ratio is near or above 85%.
However, some strategists see it as attractive after the annual decline. Cantor Fitzgerald recently wrote that the valuation “has now been reduced to a much more reasonable level.”
“With inflation heating up and yields rising, we believe this environment will attract capital to stocks that are less sensitive to interest rates, and given AAPL’s underperformance, this is a key opportunity,” said Eric Johnston, head of cross-asset and equity derivatives at Cantor Fitzgerald. I believe it will work. I am a beneficiary of this rotation.”
