Sometimes all it takes to give a stock a little extra edge is an analyst suggesting it's a good idea to pick some up. Apple (NASDAQ:AAPL) experienced that effect today, gaining about 0.36% in pre-market trading on some positive new outlooks from a couple different analyst fronts, both of which had some rather exciting things to say about Apple's immediate future.
New Love for a Well-Loved Company
The new praise for Apple came from two analysts in particular, starting with Loop Capital, which upgraded from “hold” to “buy.” That's a nice step upward, and came about as Loop perceived a likely improvement ahead for Apple's bottom line. Apple has been working hard to improve its viability as a service provider, and Loop Capital took notice of that point. Additionally, Apple still has an excellent hardware line, even if there have been some reports that the innovations coming out of the company aren't quite as innovative as they once were.
Additionally, Morgan Stanley threw in some praise of its own; though it didn't actively upgrade its current assessment—it hasn't actually touched Apple officially since late August—it did have some kind words to say about the company via analyst Katy Huberty. Huberty specifically called out the 5G iPhone concept, which has been thus far “underappreciated”.
Not Exactly Alone
While commentary about Apple hasn't been brisk over the last month or so, there have been some positive signs from the broader analyst community, as far as our latest research can attest. Wedbush, just five days ago, stuck to its guns in calling Apple an “outperform,” though on the flip side of that coin, Goldman Sachs reiterated its own rating of “sell”.
The company is currently an aggregate “buy”, and has actually recovered its status to an average not seen in the last six months. Currently, the company has three “sell” ratings to its credit, along with 14 “hold” and 28 “buy” ratings. In a comparison to last month, we see the impact of Loop Capital's switch, as it was three “sell”, 15 “hold” and 27 “buy.” In an unexpected move, however, the aggregate price target has dipped slightly, going from $111.48 last month to $111.38 this month. Again, a lot of these price targets are fairly old, so we may well get some shifting when the latest quarterly figures emerge for Apple.
More Than the Analysts Can Say
Interestingly, a lot of Apple perspective seems a bit stale; in the last month, there have been only five changes in the field; those already mentioned make up three, but for November, we also heard from Credit Suisse who kept a “neutral” rating on the stock and a price target of $106. The fifth move for the month was from JPMorgan Chase, who set a “buy” and a price target of $150. The last big shift for analyst perspective was just ahead of Halloween when five analysts weighed in, and three of them raised their price targets.
There's more going on here than just analysts, though; we have the effects of the 5G iPhone line finally starting to be felt after false starts and Apple store closures. We have some further changes in Apple also emerging, like recent cuts to App Store costs. Apple rolled out what it called the App Store Small Business Program, which would give small business owners—as well as independent app developers—discounts on many of Apple's fees. Those who pull in under $1 million from the App Store will see only a 15% commission paid to Apple, as opposed to the 30% paid previously.
With new reports about excellent performance from the M1 Macbook Air coming in and word that 2022 iPhone models could allow for up to 10X optical zoom in the cameras, we're getting a nice slug of good news around Apple and its product line. None of these factors is a world-beater in its own right, but when you combine them together, a picture starts to emerge of an Apple that's taking itself more seriously and isn't expecting to conquer the world on the strength of its name alone.
A diversified product line will likely be very helpful to Apple going forward, especially if it can inject some of that old innovation into same. It's also putting a lot more bulk and substance into its services, including addressing one of the biggest problems about app development: Apple's onerous cut of app store revenue. These points should help keep its bottom line rolling along, even if we see issues crop up in the wider economy. There's a reason Apple is not only a “trending stock” but also one of our “most-upgraded stocks,” after all, and we're getting a look at why this company keeps delivering results for investors.
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