[ad_1]
Published: March 4, 2024 at 2:33 PM ET
Some of 2023’s biggest tech companies have continued to rise this year, but Apple stock hasn’t. The iPhone maker’s stock fell 3% in Monday trading and is on track to fall about 10% by early 2024.
But Evercore ISI analysts see “a lot of tailwinds building up.” [Apple’s] That’s despite the consumer electronics giant losing some of its luster on Wall Street after a disappointing March quarter outlook that suggested a decline in sales.
“meanwhile…
Some of 2023’s biggest tech companies have continued to rise this year, but Apple stock hasn’t. The iPhone maker’s stock fell 3% in Monday trading and is on track to fall about 10% by early 2024.
But Evercore ISI analysts see “many tailwinds stacking up.” [Apple’s] That’s despite the consumer electronics giant losing some of its luster on Wall Street after a disappointing March quarter outlook that suggested a decline in sales.
“I understand the disappointment of those around me, but [the March-quarter guidance] iPhone sales appear to be remaining almost flat, with some exceptions. [one-time] Dynamics,” Evercore’s Amit Daryanani wrote in a note to clients.
Additionally, Apple’s
AAPL
The margin story appears to be intact. The company said “gross margins continue to trend upwards,” and analysts had modeled a gross margin of 45.5%, but now expect margins to be in the range of 46% to 47% for the March quarter. . Daryanani said this kind of talk “obviously dampens the impact of earnings missing” in the March quarter.
See also: EU’s record Apple antitrust fine is just the beginning of this year’s Big Tech regulatory crackdown
Additionally, he is excited about Apple’s upcoming developments. He said commentary on the company’s recently launched Vision Pro headset (prices starting at $3,499) has been “gradually getting better” and interest among businesses has “increased quite a bit.”
Apple executives have also teased an announcement on generative artificial intelligence later this year, which could be another catalyst. Apple has been less vocal about AI than other big tech companies, which could hurt its stock price as Wall Street gets swept up in AI fever.
read: Apple just did something unusual. Can it help stock prices amid sluggish growth?
Late Friday, Daryanani withdrew his outperformance forecast for Apple’s stock that had been tied to its latest earnings report, but he maintained his usual outperform rating and $220 price target. He said other drivers for the stock could include Apple’s “sustainable” free cash flow generation and strengthening the company’s capital allocation program.
Apple typically updates its share buyback and dividend programs at the same time as it reports March quarter earnings.
But Apple’s stock fell in Monday trading after the European Union fined the company nearly $2 billion for unfairly prioritizing its music streaming service over competing services.
[ad_2]
Source link
