Shares of Apple Inc. they are down more than 16% from January highs, but one analyst argues that investors should take advantage of the fall to take advantage of a “golden buying opportunity”.
Daniel Ives of Wedbush added Apple AAPL,
on his company’s “best ideas” list Wednesday, writing that there’s room for the company to positively surprise Wall Street with its iPhone results this fiscal year.
Shares of Apple fell 0.2% in the morning trading. It has risen 69.4% in the last twelve months, while the Dow Jones Industrial Average DJIA,
has advanced 28.6%.
Ives said concerns about cuts in iPhone forecasts this year have put pressure on stocks recently, but sees opportunities on the rise. Although the FactSet consensus now requires the sale of 224 million units of iPhone this fiscal year, Ives argues that the company could sell more than 240 million given strong demand in Asia and a large iPhone base at are ready for updates.
See also: Apple eclipses Samsung as leading smartphone provider for first time in four years, says Gartner
He wrote that average selling prices should benefit, as it appears that Apple is successful in selling more expensive iPhone models such as the iPhone 12 Pro and iPhone 12 Pro Max, while the iPhone 12 Mini is “significantly reducing production / demand worldwide.”
Nikkei Asia reported Wednesday that Apple was making dramatic cuts to its previous iPhone 12 Mini production plans starting in December, while making “comparatively smooth” cuts to other iPhone models, in part because some components and parts that formerly intended for the Mini are being moved to more expensive models.
New production targets are still slightly above Apple’s shipments from the same period a year ago, according to the report, citing some unnamed sources who said Apple’s cuts would occur after the company had been especially aggressive with his goals months ago to make sure he would have enough components at a time when some were missing.
Apple did not immediately respond to a request for MarketWatch comment.
Ives remains optimistic about the outlook for Apple’s iPhone, arguing that the “supercycle party” could continue with the iPhone 13 expected this fall given the supply chain’s optimistic indications. He has “more confidence that the iPhone 13 will have a 1-terabyte storage option, which is twice as much as today’s larger Pro storage capacity,” suggesting Apple might have more pricing opportunities.
It has a score above the rating and a target price of $ 175.
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IDC analysts forecast on Wednesday that smartphone shipments could increase 5.5% in 2021, thanks to higher availability of 5G-enabled devices and “accumulated demand” for new phones. By 2020, IDC had estimated that smartphone shipments were down 5.9% from the previous year.