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UBS On Apple: The Positives Still Outweigh The Negatives, Raise Price Target To $210

UBS On Apple: The Positives Still Outweigh The Negatives, Raise Price Target To $210
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Despite "tepid" iPhone demand and other concerning read-outs, there are still plenty of reasons to like Apple Inc. (NASDAQ: AAPL)'s stock, according to UBS.

The Analyst

UBS' Steven Milunovich maintains a Buy rating on Apple's stock with a price target lifted from $190 to $210.

The Thesis

UBS' proprietary "Evidence Lab Global Smartphone Survey" paints a bullish picture for Apple's stock, Milunovich said in a Friday report.

A survey of 6,700 consumers across five countries found weak-but-rising iPhone buying intentions, the analyst said.

An ongoing narrative shift is underway in iPhone unit growth to a "consistent franchise" characterized by low single-digit hardware growth augmented by higher-margin and faster-growing services revenue, Milunovich said. 

Here's a summary of other findings from the UBS survey. 

The Negatives

  • iPhone buying intent is down from a year ago in the U.S., but flattish in the U.K. and China.
  • The average handset age is rising in every region surveyed except for China.
  • Longer upgrade cycles appear to be the norm, as customers holding onto their phones longer limits near-term growth.

The Positives

  • More than 40 percent of those surveyed who plan to buy a new iPhone intend to purchase the iPhone X.
  • A larger number of consumers who aren't buying the latest iPhone 10 cycle are looking to buy an older "Plus" iPhone.
  • Consumers in developed countries still want to upgrade their iPhone every other year, which may imply upside to the Street's 1-percent estimated iPhone unit increase in fiscal 2019.

Price Action

Apple shares were up 1.36 percent at $189.40 at the time of publication Friday. 

Related Links:

KeyBanc: What To Expect From Apple's WWDC Presentation

Maxim Group: Apple's Long-Term Services Business 'Not Attractive Enough' For Bullish Rating

Photo courtesy of Apple. 

Latest Ratings for AAPL

Jan 2019CitigroupMaintainsBuyBuy
Jan 2019NomuraMaintainsNeutralNeutral
Jan 2019Canaccord GenuityMaintainsBuyBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

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