Apple Inc. stock continued its decline on Tuesday after after breaching its 200-day moving average on Monday. Though many are concerned with the sharp fall, the recent decline in the stock is seen as a buying opportunity by more than one analyst.
iPhone to push revenues for Apple
Though many investors are concerned over the upcoming quarters for Apple , Robert W. Baird analyst Will Power feels iPhone sales will push the stock higher.
On Tuesday, in an interview with CNBC’s “Squawk Alley,” Power said “The company had an enormous iPhone shipment quarter in that quarter a year ago and I think there are questions and concerns as to whether they can really beat that.” The analyst believes the firm can certainly do so, and when the iPhone sales are seen along with other factors, “we like the stock here on this weakness.”
Apple is expected to come up with the iPhone 6S this fall. It has usually been seen that the Apple stock tend to perform well in the months leading to the launch, believe Power, who has set an Outperform rating on the iPhone maker. A new iPhone along with opportunities such as Apple TV and other catalysts in 2016, the analyst believe would push the stock up heading into next year.
China concerns overestimated
Steve Milunovich of UBS also believes iPhone to be a catalyst. Though the analysts believe revenue growth to slowdown, expect iPhone sales to beat the estimates. Talking to “Squawk on the Street,” the analysts expect Apple to sell 245m phones next year, a rise of 6%.
“Unless the fundamentals are really different from what we think they are, there is not much downside. We’re just waiting for a catalyst on the upside,” said Milunovich, who has a Buy rating on the stock.
The analysts feels investors are wrong to expect weak sales of the iPhone 6S, noting Apple has revealed that so far only 27% of the iPhone users upgraded to the new model in past cycles. Strong upgrade demand can be expected if they’re right.
On China concerns, the analysts feel the stock market turmoil will not have a meaningful economic impact as only 7% of the Chinese population own the stock. In addition, the analyst believes more than half of the iPhone demand in China will be from the first time buyers.
Meanwhile, Apple shares continue to decline hitting their six-month low. On Tuesday, the stock was down 3.21% at $114.64. The stock was seen as the biggest drag on three US exchanges, says Reuters. Concerns over iPhone demand and a slowdown in China are the primary factors pushing the stock down, traders told Reuters.