After a 12% rout in December, Apple’s stock valuation looks very compelling, contends Citi analyst Jim Suva.
“We believe that demand will be set up for a more stronger 2023,” Suva said on Yahoo Finance Live (video above). “We like the stock here at these levels.”
Suva has a $175 price target on Apple, which is about 35% higher than the stock’s current levels. The analyst’s upbeat call on Apple reflects his optimism on new AR/VR glasses dropping in 2023, a fresh push into India, and a stepped-up pace of share repurchases and dividends.
“Apple has been building out that [AR/VR] app ecosystem, so that’s why we see now the hardware coming out later next year as a positive,” Suva added.
To be sure, Apple’s stock had a challenging time for much of 2022 — especially in the final stages of the year.
Shares of the tech giant have declined about 27% year to date despite Apple’s reputation as a safe-haven investment with a formidable balance sheet flush with cash and a steady stream of repeatable services income.
But just like other large companies, the volatile global economic backdrop has hit Apple in the form of slowing iPhone and accessory sales as well as production delays out of COVID-stricken China.
The external crosscurrents have sent most of Suva’s peers on the Street back to the drawing board with respect to their financial estimates for Apple.
“We are again moderating our expectations for the Dec-Q (F1Q23) on the back of the impact of the recent supply chain challenges faced by Apple in relation to operations at Hon Hai’s assembly facility in Zhengzhou, China,” JPMorgan tech analyst Samik Chatterjee said in a recent client note.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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