Bank of America upgraded Apple shares to buy from neutral on Monday, saying the recent pullback in the stock “presents opportunity.”
The bank also raised its 12-month price target to $210 from $180. Apple’s shares rose 1.7 percent in premarket trading Monday to $175.80.
Here’s what analyst Wamsi Mohan said in the note about the upgrade:
APL stock is down 26% from its peak (S&P down 9%) and up 9% YTD (inline with S&P 500 and below the [tech sector’s return] of 13%). Our scenario analysis suggests that shares are discounting a “declining hardware” scenario (ex-cash, services), and the debate hinges on the L/T trajectory. In our opinion, weakness in hardware is not entirely structural. Our new PO of $210 is based on assumptions closer to scenario 2 (flat hardware, and somewhat slower than historical growth in Services