March 6, 2023 9:13 am | 1 minute read
apple inc (NASDAQ:AAPL) shares are trading higher on Monday after positive analyst reports from Goldman Sachs.
What happened: Goldman Sachs analyst Michael Ng launched coverage of Apple with a buy rating and announced a price target of $199, citing significant upside potential in the tech giant’s services business.
“Apple’s success in best-in-class hardware design and resulting brand loyalty has resulted in a growing installed base of users, providing insight into revenue growth by reducing customer churn, reducing customer acquisition costs for new product and service launches, and driving repeat purchases encourage,” the Goldman analyst wrote in a new note to clients.
Ng expects installed base growth, secular growth in services and new product innovation to more than offset cyclical headwinds over the next 12 months.
The Goldman Sachs analyst expects services to drive the bulk of gross profit growth over the next five years. The durability of Apple’s installed base underpins the recurring revenue opportunity that Ng calls an “Apple-as-a-Service” opportunity.
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The analyst noted that Apple’s valuation is attractive relative to select large-cap technology and consumer peers, as well as its historical multiple. According to Benzinga Pro, Apple is currently trading at a price-earnings multiple of around 25.
See Also: Apple Testing New iMacs In Late Production Stages, Gurman Says: What Investors Should Know
AAPL Price Action: Apple has a 52-week high of $179.61 and a 52-week low of $124.17.
According to Benzinga Pro, the stock is up 1.83% at $153.84 at the time of publication.
Photo: courtesy of Apple.
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