Wells Fargo Analysts Say When Is The Best Time To Own Apple Shares

The best time to own Apple Inc. AAPL shares "is in the May or June timeframe," according to Wells Fargo's Maynard Um whose analysis suggests "now would be the time to get more bullish on AAPL shares."

The analyst's per carrier analysis shows investors should get bullish around the iPhone 7 cycle as "every non-S cycle sees a higher units per carrier versus an S-cycle."

"If we assume the iPhone 7 has a lower units per carrier in the December qtr than the iPhone 6 (cycle to cycle comparison), we still arrive at more than 80MM units in the December qtr even assuming no new carrier additions," Um wrote in a note.

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The market believes the iPhone in 2017 will be the big refresh, as Apple may want to make it count on the 10th anniversary of iPhone. However, the analyst said "upgrades will happen in 2016 with iPhone 7" as two-year contracts come to an end and carriers tend to subsidize another smartphone at the end of the contract.

However, Um cut his FY16 EPS view to $8.32 from $8.72 to adjust for inventory destocking but maintain FY17 EPS forecast of $10.03.

"We reiterate our Outperform rating as we believe the iPhone 7 growth potential is now being underestimated," Um added.

According to TipRanks, Um has a success rate of 59 percent with an average return per recommendation of +13.2 percent. The analyst is ranked 200 out of 3,906 analysts.

Slowing iPhone growth, a dip in average selling prices and weak third quarter outlook weighed on Apple shares, which were down 6.28 percent to $97.80. Um has a valuation range of $120 to $130 on the stock.