Apple Inc.’s AAPL stock has baked in so much negativity as reflected by the 28% pullback since it hit an all-time intraday high of $182.94 in early January 2021. Despite the headwinds dragging fundamentals lower, an analyst at KeyBanc Capital Markets is optimistic about the stock.
The Apple Analyst: Analyst Brandon Nispel maintained an Overweight rating and a $177 price target for the stock.
The Apple Thesis: Indexed spending, based on KeyBanc First Look Data, showed 53% month-over-month spending growth for December, exceeding the three-year average of 33%, Nispel said.
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That said, data for the three months ended December showed flat quarter-over-quarter spending compared to three-year average growth of 12%, he added.
The data, according to the analyst, suggests a stronger December did not offset a weaker start to the quarter.
Apple’s December quarter hardware sales have grown 68% sequentially over the three years, while the consensus calls for 45% growth for the 2022 December quarter, the analyst noted. Consensus expectation has come down since the end of October, reflecting a soft iPhone supply and demand outlook, Nispel said.
KeyBanc, however, did not rule out further downside risk.
“We feel the set-up for F1Q23 could be less bad than feared where we expect investors to look beyond near-term challenges to Hardware growth,” Nispel said. User growth is more important than the near-term unit disruptions, he added.
Price Action: Apple closed Tuesday’s session 0.45% higher, at $130.73, according to Benzinga Pro data.
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