Apple stock has traded sideways in recent weeks. Still, a longtime bull sees significant upside for shares.
Pointing to strong product demand and revenue growth for its services segment, Tigress Financial Partners’ Ivan Feinseth maintained a Strong Buy rating on Apple stock (ticker: AAPL) in a note on Monday. He wrote that the company’s most recent quarter featured strong demand for the iPad, Mac, and wearables, while services had a record quarter with help from gains across several of its offerings.
The stock soared to $134.18 at the start of September before falling amid a broader rotation out of tech. In the weeks since the company’s earnings report last month, some analysts have questioned the hype surrounding Apple’s first 5G iPhone, and whether it can push the stock higher.
Though iPhone sales fell during that quarter amid weakness in China, Feinseth expects iPhone growth to pick up in the first quarter of fiscal 2021.
“Tailwinds should continue to build with the ramp-up of sales of the 5G-enabled iPhone 12, the recently announced Apple Watch 6, and its new line of MacBooks with Apple’s first internally produced M1 Processor, which is receiving rave reviews for its speed, capabilities, and reduced production costs,” he wrote.
Feinseth also points to momentum in the App Store, with increasing momentum for Apple Arcade, Apple Music, Apple TV+, and the Apple credit card. He thinks services revenue could exceed $60 billion in the coming 12 months, something he thinks can double in the next few years as penetration improves within its huge base of product users.
“AAPL’s ongoing commitment to return significant cash to shareholders will continue to provide stability in volatile markets and enhance the stock’s total return,” he wrote. “We believe significant upside in the shares exists from current levels and continue to recommend purchase.”
Apple stock was up 0.2% in premarket trading Tuesday, while S&P 500 and Dow Jones Industrial Average futures signaled gains for the broader market.
Write to Connor Smith at [email protected]
