Apple Inc. shares could see a huge upside in the coming month, according to Evercore ISI analyst Rich Ross. The stock has surged 20% in the last six months, and approximately 4% in the current month. The California-based company is set to release its result on January 31, and as per the analyst, the stock looks ultra bullish.
Technical charts suggests ultra bullish trend
On Wednesday, Ross said on CNBC’s “Trading Nation, “I think if you put aside everything you think about the company, when you break it down on just a technical basis alone, you’re staring at a very bullish stock chart in the short, intermediate and long term.”
Referring to a chart since 2011, where Apple’s stock traded around the level of $50 level, Ross says it presents a strong case of breakout to a new all-time high. This is because a technical symmetry pattern has been noticed between the decline of the share in 2012 and 2013 and drop in the prices between mid 2015 and mid 2016. During both the period, the stock retested its 200-week moving average.
As per Ross, after coming out from both the declines, the stock reached the all-time high. He notes that the current pattern in Apple Inc. is almost the same. The first high was made at around $84 in mid 2014. In the time frame of six to nine months, Ross is expecting an upside to $135 per share first, and hit the $150 mark in the coming 18 months.
Ross said he will buy the stock, sighting the symmetry pattern.
Separately, Dennis Davitt – portfolio manager at Harvest Volatality management – called Apple “the greatest value stock that no one’s ever heard of, but everybody owns.” He appreciated Apple’s 2% dividend and 14 times price to earnings ratio. On the option front, Davitt recommends selling $130 call around its all-time high from early 2015.
Apple Q1 earnings – analysts divided
When it comes to Apple’s Q1 earnings expectations, analysts on the Wall Street are divided. Bank of America Merrill Lynch analyst Wamsi Mohan has maintained a Buy rating on the stock revising target upward from $125 to $140. OTR Global, on the other hand, downgraded the stock to negative.
Mohan notes that the upcoming iPhone 8 would bring “Supercycle” of upgrade that could result in two years growth of around 10% in Apple stock. Mohan expects Apple to unveil three new phones this fall: pricey iPhone 8 with an OLED display, iPhone 7S and 7S Plus – upgraded version of the iPhone 7. Mohan has also trimmed the iPhone sales estimate for the March and June quarters from 55m to 50m in March and 44m in June quarter from 47m.
Overall, analysts have an average rating of overweight on Apple Inc. with a target price of $132.65.
This article is not intended as individual or reader-specific investment advice. Do your own research and consult a financial professional, if necessary, before investing in anything.