Apple's Regulatory Risks Led Pullback Likely To Render A Buying Opportunity, Analyst Says

  • After outperforming in 2019-2021, Apple Inc's AAPL shares largely traded in line with the SP50 (~-20% YTD), Citi analyst Jim Suva noted. 
  • Suva reiterated a Buy on Apple with a $175 price target.
  • Shares have fared better than the large-cap peers Alphabet Inc GOOG GOOGL GoogleMeta Platforms Inc METANetflix Inc NFLXAmazon.com Inc AMZN
  • Looking ahead, there are several puts and takes for Apple's products and services, given broader macro consumer woes, Suva wrote in a note titled "2023 Outlook: Six Reasons (+ Bonus Option) Apple's Shares Can Trade Higher." 
  • While the December quarter is constrained by supply (China COVID closures impacting production), the analyst believes demand for Apple's products and services will likely remain resilient throughout FY23. 
  • The analyst recognized that regulatory risks remain a significant overhang on the stock but viewed these as headline risk rather than fundamental risk. 
  • Such headlines could provide a near-term stock pullback which the analyst would view as a buying opportunity for Apple shares. 
  • Apple's current market value does not reflect new product category launches. This will change with the new AR and VR headset launch in 2023 and foldable in 2024. 
  • Price Action: AAPL shares traded higher by 2.81% at $136.03 on the last check Wednesday.
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