Apple stock has 31% upside potential, according to Wall Street analysts

After rising 48% in 2023 apologize (AAPL -1.21%) The stock has underperformed so far in 2024. The stock is down about 11% year to date, partly due to concerns about slowing iPhone sales in China. However, one Wall Street analyst sees the price drop as a buying opportunity.

Earlier this week, bank of america Securities analyst Wamsi Mohan updated his price target on the stock to $225. That price target represents a potential upside of approximately 31% over the next 12 months compared to the current stock price of $171.

Is Apple stock a buy?

According to a recent report from Counterpoint Research, iPhone sales in China fell 24% year-over-year in the first six weeks of this year. While this appears to be weighing on the stock price at the moment, Mohan pointed out that Apple has significant options for dealing with the issue.

According to Mohan, Apple is effectively lowering the prices of older phones to maintain steady demand. Analysts also say Apple’s long-term trend of shifting customers to higher-value products could help offset weak sales in China. China generated 21% of Apple’s operating profit last quarter.

A correction in the stock price is expected as the reason for the recent stock slump is sales in China. The stock was trading at a high price-to-earnings ratio of 32 at the end of 2023 and currently trades at a more reasonable P/E of 27, which is still above the market average.

Despite the weakness in the Chinese market, Apple’s earnings per share increased 16% compared to the previous quarter. This was primarily driven by increased sales in the higher-margin services segment and the company’s ongoing share buybacks.

It may take some time for the market to recover, but Apple has many strengths that could provide returns to investors outside of China.