Analysts are expecting many investors to buy Apple Inc. AAPL's stock on an "anticipation trade" into the iPhone 7 launch later this year. However, experts at Deutsche Bank remain focused on the company’s long-term fundamentals, “which suggest top-line growth will be more challenging going forward."
In a reprt on Wednesday, the firm cited a few key inhibitors to Apple's long-term growth, including:
- Slowing smartphone sales in developed markets, which seem close to saturation.
- Elongating refresh cycles, which will put further pressure on the company’s expansion in developed markets
- Lack of growth at the high end
- Limited market share penetration in emerging markets, which are more cost-focused – not good for Apple and its high-priced products.
Having said this, the analysts noted the stock's current valuation reflects both the long-term growth challenges and the "expectations for a trade into the iPhone 7 launch." Consequently, they reiterated a Hold rating and $105 price target on shares.
Shares of Apple closed up 0.21 percent at $107.13 on Wednesday.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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