Apple Inc. stock has soared over 10 percent in the past couple of weeks. That’s a stunning recovery from the big post-earnings rout that saw shares slide to their lowest in close to two years. And if history is any indication, the Apple rally is far from over.
Shares closed Thursday at $100.41, up 0.8 percent for the session.
Apple Inc. Stock Could Jump a Further 7%
Rich Ross, Head of Technical Analysis at Evercore ISI delves in to the past to get a sense of what the future has in store. His analysis found remarkable similarities between Apple’s current price action, and what happened in 2013.
During June of 2013, Apple shares “had a 40 percent decline that held the 200 week moving average.” Post that, they “put in that nice double bottom base of support…and had a fantastic rally off the 200 week,” Ross said on CNBC.
“Fast forward to today…there’s a 33 percent decline and a double bottom on the 200 week MA…I think you could be set up for a similar type surge,” he added.
Even on a shorter time frame, the charts look promising, as is evident from the recent “false break down” below an important support zone. Given this confluence of bullish setups, Ross expects Apple shares to rise to their 200 day moving average around the $107-mark.
Apple Inc. is a Long Term Value Play
Adding credence to the positive technical outlook is a number of fundamental analysts, who reckon that shares have more room left on the upside. According to a FactSet survey of 40 analysts, the average rating on Apple Inc. is equivalent to a buy, with a 12 month target price of $124.
Max Wolff, chief economist at Manhattan Venture Partners, is one such AAPL bull. The stock may not be “as exciting as it used to be…but at this price,” it represents compelling value, he noted.
Long considered a quintessential growth name, Apple currently trades at a price to earnings ratio of just around 10. No wonder, legendary investor Warren Buffett considers it a “value proposition,” which would explain his recent “shocking” disclosure of a billion dollar investment in the tech giant.
“Anybody that discounts the thinking at Berkshire Hathaway does so at their peril,” according to Bill Smead, who manages the highly successful Smead Value Fund.
So, should the average investor consider adding Apple Inc. to their portfolio? More and more prominent voices say they should.