From a note to clients by analyst Samik Chatterjee that landed on my desktop Monday:
Apple shares appear favorably positioned heading into F4Q18 (Sept-end) earnings on November 1, led by upside to investor expectations in the form of iPhone ASPs and growth in Services revenues, driven by upside to installed base growth.
Additionally, we find Apple well positioned to guide favorably for F1Q19 (Dec-end) through a combination of iPhone revenue growth (driven by ASP increases), upside to growth expectations for the recently refreshed Apple Watch, and improvement in gross margin sequentially driven by volume leverage.
Outside the business-specific drivers that drive our confidence for upside on key metrics tracked by investors, we believe any share price weakness led by the broader market conditions will provide management an opportunity to create further shareholder value through an acceleration of share repurchases.
Amongst “mega’ cap technology stocks, Apple in our view remains a strong value pick with the lowest P/E and one of the lowest PEG ratios, positioning it well to outperform if macro growth concerns continue to challenge the broader market.
Maintains Overweight rating and $272 price target.
My take: I’m struck in the chart below by the break in coverage between October 2017, when Rod Hall left for Goldman Sachs leaving behind a $176 Apple price target, and September 2018, when Chatterjee took the reins with a target $96 higher. A bull run is a terrible thing to miss.