Barclays analysts issued a report to investors today saying they believe that Apple Inc. (AAPL) has long-term growth potential because of how much the stock has fallen since last week’s earnings report.
Is Apple Inc. (NASDAQ:AAPL) showing signs of fatigue? It depends on who you ask. If you were to ask Barclays analysts, they would tell you that the company is just gearing up for another round of excellency. In a report issued to investors today, Barclays analysts reiterated their Overweight rating and $575 price target on shares of Apple Inc. (NASDAQ:AAPL).
The backlash to the company’s stock since its earnings report last week has been tremendous, and Barclays analysts said they believe the big sell-off was due to a lack of analysis on the part of investors. They note investors’ concerns about competition, execution, and gaps in the company’s product line, but they also say there were plenty of positives like strong cash flow and a conservative margin outlook. They say these positives could “’grow on’ investors now that that damage is done.”
Barclays analysts said they believe that by April, Apple Inc. (NASDAQ:AAPL) may hold an event to launch new Mac computers and iPads. They say we could also get a preview of the new iOS at the same time. That could even bring with it additional web and data services.
The analysts said they also believe that as the year goes on, it will become “increasingly apparent” that the company is preparing two new iPhone models to ship out this summer. Those new phones will bring big expectations and possibly be loaded with new Apple Inc. (NASDAQ:AAPL) innovations.
In today’s report Barclays analysts said they believe Apple Inc. (NASDAQ:AAPL)’s valuation is “attractive” and that the stock can continue benefiting from the expansion of the iPad and iPhone product lines. They say their upside case is that shares of Apple Inc. (NASDAQ:AAPL) would reach $750 per share, based on 15 times their 2014 fiscal year earnings per share estimate. They based their downside case at $350 per share and seven times their 2014 fiscal year earnings per share estimate, which they say is “about in-line with consumer electronic companies facing increased competition and margin pressure,” except they factored in Apple Inc. (NASDAQ:AAPL)’s cash.