Laura Martin of Needham recommends investors to buy weakness in Apple Inc. AAPL shares as the scenario would change after users start to upgrade their iPhones.
The analyst expects upside in the second half of 2016 and noted tough year-over-year iPhone comps, currency headwinds, and $2 billion inventory drawdown as "temporary issues."
"[A]ll those iPhone buyers will eventually upgrade their iPhones as our work shows an 8 years average holding period inside the AAPL ecosystem," Martin wrote in a note.
The analyst, who has a Strong Buy on Apple shares, is betting on increasing android conversion rates and growth in services revenue, which grew 20 percent to $5.99 billion in the second quarter.
Following the second quarter results, the analyst cut his third quarter revenue forecast by 12 percent to $43.34 billion and EPS view by 21 percent to $1.43.
The analyst also cut FY16 revenue estimate by 4 percent to $220.7 billion and EPS forecast by 7 percent to $8.48.
Apple shares were down 6.05 percent to $98.03, while Martin has a price target of $150.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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