Apple Gets Bullish Outlook From Analyst: 'Near-Term Risks' Lowered, Bull Case Re-Ignited

Technology giant Apple Inc AAPL gets a price target upgrade from an analyst, which comes after the company's fourth-quarter financial results reported last month and the release of the iPhone 15 in September.

The Apple Analyst: Morgan Stanley analyst Erik Woodring has an Overweight rating on Apple and raises the price target from $210 to $220.

The Analyst Takeaways: Apple is the most valuable public company in the world, valued at over $3 trillion.

Related Link: Apple Delivers Q4 Beat, But Key iPhone Revenue Comes In Shy Of Estimates

Despite a 55% increase in Apple's share price in 2023, Woodring is "turning more positive" on the company with near-term risks mitigated and a recovery in fundamentals.

"The macro backdrop remains challenging, but we're incrementally more positive on Overweight-rated Apple as near-term risks now appear to be more limited/pushed out, and excitement around Edge AI, Services, and gross margin strength re-ignites the bull case," Woodring said.

The analyst said the recent move in Apple shares comes with strength in its services and gross margins offsetting challenges for the iPhone in China. Growing anticipation that Apple could be a major artificial intelligence enabler has also helped, Woodring said.

Along with the strengths, Woodring said that several items from the bear thesis have weakened, with stability in iPhone supply chain and a key trial between Alphabet and the Department of Justice being pushed out years.

For Woodring, six key questions and topics remain for Apple going forward, which include

1. Regulation/legislation as a key risk for Apple moving forward
2. How company is using Generative AI
3. iPhone 15 demand
4. Risk of the App Store from the Digital Markets Act
5. Gross margins
6. Vision Pro launch in early 2024

"Longer-term, the upside to further installed base growth and user monetization that stands at $1 per user per day, and thus lifetime value, remains a key driver of upside, embedded in our $270 bull case."

AAPL Price Action: Apple shares trade at $194.64 on Friday versus a 52-week trading range of $124.17 to $198.23.

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