Apple Stock Oversold; RBC Sees Buying Opportunity
Apple ‘s ( AAPL ) recent stock slide is an overreaction to the company’s disappointing March-quarter earnings report and could spell a buying opportunity, RBC Capital Markets analyst Amit Daryanani said in a research report Sunday. Before Monday, Apple shares had fallen in 14 of the last 16 trading sessions and were down 17.3% since April 14. Apple stock was up nearly 1%, near 93.50, in morning trading on the stock market today . Daryanani reiterated his outperform rating on Apple stock, with a price target of 120. “Investor feedback on Apple post-earnings call is skewed negative,” Daryanani said. “But we think the stock is oversold and should see a healthy bounce from here.” Apple stock has come under “severe pressure” since its fiscal second-quarter earnings report on April 26, he said. “There has been increased investor interest especially at current levels as investors are trying to gauge if the stock is near a bottom,” Daryanani said. “Our perspective remains — stock is oversold and valuation should provide support at these levels.” For fiscal Q2, Apple posted its first year-over-year sales decline since 2003 and first-ever drop in iPhone unit sales. For the current Q3, Apple is targeting sales of $42 billion, down 15% from the same period last year. Apple’s iPhone sales are slumping because of tough comparisons to the huge iPhone 6 upgrade cycle and slowing smartphone sales overall. Bears on Apple stock say iPhone replacement cycles will be extended and that the upcoming iPhone 7 won’t be compelling enough to spur upgrades. They see Apple struggling in China and profit margins heading down. Bulls on Apple stock say iPhone growth will accelerate over the next few years and services revenue, including App Store and Apple Pay, will continue to grow rapidly. Also, new products, such as a rumored Internet TV service, could provide a lift to Apple over the next five years, Daryanani said. RELATED: Apple Stock Hits 2016 Low Amid Doubts About Its Future Apple Watch Still Preferred By Dudes; Fitbit Liked By Ladies