The shares of Apple Inc. are down more than 16% from their January high, but one analyst says investors need to capitalize on the dip to seize a “ golden buy opportunity. ”
Daniel Ives from Wedbush added Apple AAPL,
Wednesday on his company’s “ best ideas ” list, writing that there is room for the company to positively surprise Wall Street with its iPhone results this fiscal year.
Apple’s stock fell 0.2% lower during morning trading on Wednesday. It is up 69.4% in the last 12 months, while the Dow Jones Industrial Average DJIA,
is up 28.6%.
Ives said concerns about cuts to this year’s iPhone forecasts have put stocks under pressure lately, but he sees opportunities for upside. While the FactSet consensus now calls for 224 million iPhone units to be sold this fiscal year, Ives says the company could sell more than 240 million, given strong demand in Asia and a large number of iPhones worldwide that are ripe for upgrades.
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He wrote that average retail prices should benefit as Apple appears to be successful in selling higher-end iPhone models such as the iPhone 12 Pro and iPhone 12 Pro Max, while the iPhone 12 Mini “is being scaled back significantly around production / demand worldwide. “.
Nikkei Asia reported on Wednesday that Apple made drastic cuts to its previous iPhone 12 Mini production plans starting in December, while making ‘relatively mild’ cuts to other iPhone models, in part because some components and parts once intended for the Mini are becoming expensive. models.
The new manufacturing targets are still slightly above Apple’s shipments from the same period a year ago, the report said, while citing some unnamed sources that said Apple’s cuts come after the company had been particularly aggressive with its goals months ago. making sure it had enough components at a time when some were scarce.
Apple did not immediately respond to a MarketWatch request for comment.
Ives remains bullish on Apple’s iPhone outlook, arguing that the “supercycle party” could continue with the iPhone 13 expected this fall, given the supply chain’s optimistic indications. He has “increased confidence that the iPhone 13 will have a 1 terabyte storage option, which is double today’s highest Pro storage capacity,” suggesting that Apple could have more pricing options.
He has an outperform rating and a target price of $ 175 on the stock.
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Analysts at IDC predict Wednesday that the total number of smartphone shipments could rise 5.5% by 2021, fueled by increased availability of 5G devices and “pent-up demand” for new phones. For 2020, IDC had calculated that the number of smartphones fell by 5.9% compared to a year earlier.