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“We note that Apple is not inexpensive & worry that EPS estimates for 2023 may be too high” – claims Toni Sacconaghi of Bernstein, as he looks out to what the future may hold for one of the world’s most valuable public companies.
The analyst highlights Apple’s (NASDAQ:AAPL) staggering historical tendency to outperform the broader market in the 3-month period ahead of new iPhone launches (between June and September) – “Apple has outperformed 14 of 15 years before iPhone launches” – but questions if 2022 is the year the trend finally breaks?
He sees several key concerns that may continue to hinder the shares through September 2022 and after:
Bernstein does leave the room open for potential outperformance, citing current “generally cautious” investor sentiment, as well as Q3 estimates that “do not look unreasonable”, but concludes that on the sum of all factors, “risk/reward over the next 6 months – 2 years is neutral to modestly negative”.
The analyst reiterates a “Market Perform” rating with a $170 price target on the shares.
AAPL closed at $135.35 yesterday, down 26% YTD, but still up over 1% from this time one year ago.