Bernstein sees Apple stock rising to $290 in bull-case scenario
The investment firm views Apple “as a quality compounder, with mid-single digit revenue growth, improving margins, disciplined capital return, and double-digit earnings per share growth.” “Given its negative cash conversion cycle, the stock is less expensive than it appears,” analysts led by Toni Sacconaghi added.
“Investors have fared well by maintaining AAPL as a core holding, and adding to positions on pullbacks.” Bernstein highlights Apple's unique position in the market with over 2.3 billion devices and nearly one billion “unique, demographically attractive users.” Moreover, Sacconaghi and his team see the iPhone maker as a beneficiary of AI advancements in two major ways. Firstly, an accelerated replacement cycle for Apple products is anticipated, likely around the fiscal year 2026. Secondly, Bernstein points out increased revenue opportunities for Apple, driven by the distribution and integration of large language models and third-party applications. “Encouragingly, given its position as a channel/platform, Apple’s capex has remained low. A key question is whether AI could structurally alter iPhone’s replacement cycle,” analysts note. They also observed that Apple stock has a distinct seasonal trading pattern, and while the iPhone 16 cycle might be tepid and could disappoint, the firm advises investors to buy the stock if it drops to $200 or below, particularly during the February to April timeframe. Bernstein’s bull case for the stock implies Apple reaching $9 in EPS by the fiscal year 2026, which could value the stock at $290 per share. On the other hand, the firm also acknowledged existential risks for the company such as a shift in hardware platforms, a tariff war or political escalation with China, or the emergence of a super app, while expressing less concern about potential remedies from the DOJ's antitrust case against Google (NASDAQ:Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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