CNBC had the goods first.
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.