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With iPhone production data continuing to show weakness, Apple ( AAPL ) stock isn’t likely to perk up until the second half of the year, Mizuho Securities analyst Abhey Lamba said in a report Monday. Mizuho’s Japan team on Monday lowered its iPhone production forecast after checking with various component suppliers. It now expects iPhone unit production to fall 30% year over year in the first half of the year, followed by a 9% increase in the second half. “Supply chain data points could start inflecting in (the second half of calendar 2016), helping the stock perform,” Lamba said in a report. The ramp up of the supply chain would be timed with the production of the iPhone 7, expected to launch in September. Lamba reiterated his buy rating on Apple stock with a price target of 120. Apple was up fractionally in early-afternoon trading near 94 on the stock market today . “We continue to think Apple is undervalued at the current level as investors are likely extrapolating supply chain information indefinitely while the macro environment is not helping,” he said. “However, we expect the stock to work in (the second half of calendar 2016) as data points from the supply chain start to inflect upwards.” The biggest question facing Apple this year is whether the iPhone 7 can jump-start handset sales growth, which has stalled with the iPhone 6S. Mizuho’s survey data indicate that people are holding onto their iPhones for longer periods before replacing them. “Our survey indicated elongation of life of iPhones from about 20 months to about 27 months, but we think it is tough to expect average life of phones to go beyond 2.5 to 3 years,” Lamba said. “Apple still has a significant installed base on pre-iPhone 6 versions and many iPhone 6 users will likely be ready for normal upgrades by 2016-end. We have modest growth assumptions for iPhone 7 over iPhone 6S cycle, while we agree that success of iPhone 6 cycle will be tough to repeat.” RELATED: Morgan Stanley Says Apple Stock Ripe For Picking . Scalper1 News
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