Apple pops after Merrill Lynch issues Buy (updated)

CNBC had the goods first.

From “Bank of America upgrades Apple to buy, says ‘pullback presents opportunity’”:

Bank of America upgraded Apple shares to buy from neutral on Monday, saying the recent pullback in the stock “presents opportunity.”

“AAPL stock is down 26% from its peak (S&P down 9%) and up 9% YTD (inline with S&P 500 and below the S15INFT of 13%). Our scenario analysis suggests that shares are discounting a “declining hardware” scenario (ex-cash, services), and the debate hinges on the L/T trajectory. In our opinion, weakness in hardware is not entirely structural. Our new PO of $210 is based on assumptions closer to scenario 2 (flat hardware, and somewhat slower than historical growth in Services).”

Mohan, who made a prescient downgrade of the stock at the start of November, listed in the note eight other reasons why Apple is a buy here including “stability of supply chain order cuts” and “growth across healthcare, wearables and increasing services penetration.”

Upgrades to Buy from Neutral, raises price target to $210 from $180.

My take: This could signal the start of a new round of upgrades. Waiting to get my hands on the note.

UPDATE: Got the note. See Merrill Lynch: Ten reasons to be bullish on Apple

UPDATE 2: The stock was on fire Monday, closing at $178.90, up $5.99 (3.36%) for the day.

One Comment

  1. John Konopka said:

    Curious. Was it what they said or was it because it was Merrill Lynch?

    March 12, 2019

Leave a Reply