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Bank Of America Upgrades Apple To Buy, Sets $130 Price Objective

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Bank Of America Upgrades Apple To Buy, Sets $130 Price Objective
  • Apple Inc. (NASDAQ: AAPL) shares have declined 20.08 percent over the past six months, falling to a low of $96.45 on January 7.
  • Bank of America Merrill Lynch analysts upgraded the rating on the company from Neutral to Buy, with a price target of $130.
  • The recent reduction in expectations and the negative supply chain data have pressured the stock, and the analysts believe that investor concerns are now priced into the stock.

According to the Bank of America analysts, there appear to be “multiple levers to drive upside,” including the launch of the new Apple Watch, the iPhone 6c and 7 launch, and the capital return update.

Related Link: Mizuho Upgrades Apple To Buy, Sees $120 As Investors 'Missing The Forest'

The analysts explained that the primary reasons for the upgrade included Bank of America’s China Apple survey, which revealed that demand for iPhones remains strong in the country, with iPhone being the most popular brand and about 50 percent of iPhone users intended to buy a new one in 2017.

In addition, the potential release of the 4-inch iPhone 6c is expected to “drive increased conversions from feature phones.”

The analysts also noted that Apple's stock continues to be underweight in large cap fund holdings. “Given the recent pullback, we believe long only fund managers may reconsider AAPL, especially given the outperformance of other large cap tech companies last year,” the report said.

Finally, the analysts mentioned that Apple’s large cash balance offers the company optionality to create new revenue streams and enter new markets.

Latest Ratings for AAPL

DateFirmActionFromTo
Apr 2021Morgan StanleyMaintainsOverweight
Mar 2021UBSUpgradesNeutralBuy
Mar 2021Evercore ISI GroupMaintainsOutperform

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

 

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