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Technology

After a bracing drop, Apple could now be an epic buy

Apple investors are now suffering from an unusual condition: loss of money.

After surging as much as 42 percent from the end of 2016 to the beginning of September, Apple has seen a bracing series of losses. The stock slid 5 percent last week alone, for its worst weekly performance in more than a year.

Recent concerns have revolved around Apple’s new iPhone 8 and iPhone X products, which were unveiled on Sept. 12. Mild reviews for the iPhone 8 and talk of short lines for the product appear to have taken some wind out of the stock’s sails.

Yet Wall Street analysts, always a group somewhat predisposed toward looking on the bright side, say the lack of enthusiasm could actually be a bullish indicator.

“Any Weakness for Early Sales of iPhone 8 Could Be a Case of ‘Short-term Pain for Long-Term Gain,'” Piper Jaffray analyst Michael Olson advised in a Friday note. He explained that “potential buyers may wait for iPhone X,” and that since the X will tend to be about $250 more expensive than the 8, “a mix shift toward iPhone X, even to the detriment of near-term iPhone 8 units, is positive for Apple.”

Nomura Instinet analyst Jeffrey Kvaal struck a similar tone Friday.

“Our iPhone 8 shipment time tracker indicates pre-orders are not as robust as during the 7 cycle. We believe slow carrier promotions and relatively modest feature upgrades to the 8 are shifting demand to the X, which is a positive for Apple,” Kvaal wrote, albeit adding: “We cannot rule out the possibility, however, that installment plans and high [average selling prices] are inhibiting demand.”

David Seaburg, head of equity sales trading at Cowen & Co., considers the stock to be a slam dunk at current levels.

“The X, in particular, will show up in Q4 numbers,” Seaburg said Friday on CNBC’s “Power Lunch.” “You should absolutely be buying the stock here,” and “you could trade it up to $180,” referring to a level 19 percent above Apple’s $151.89 Friday closing price.

Robert Sluymer, head of technical research at Fundstrat Global Advisors, strikes a similar tone.

Apple’s drop from its high of $164.94 has taken it right down to an area of “very good trading support” which lies from $147 to $150, Sluymer said Friday on “Power Lunch.”

The fact that the stock has been such a powerful market leader means that “you want to own the name,” and since its short-term performance has brought it to a key level of support, “I think this is where you begin to nibble,” Sluymer said.

Source: Tech CNBC
After a bracing drop, Apple could now be an epic buy

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