On the surface, Apple Inc. wouldn’t appear to have the most optimal setup. The consumer-electronics company has been facing “weaker consumer electronics spending, a challenging macro backdrop, [foreign-exchange] headwinds, iPhone production shortages, and lingering COVID restrictions”—all factors that could drive the company to its first fiscal year of revenue and earnings declines since 2019, according to Morgan Stanley analyst Erik Woodring.
Looking more deeply, however, Woodring thinks Wall Street is overlooking numerous compelling parts of Apple’s
story that could play out “beyond the near-term.” He cheered “a catalyst-rich event path over the next 12 months that is underappreciated by investors, including reaccelerating iPhone and Services growth, record gross margins, two new product launches, and the potential introduction of an iPhone subscription program.” These “5 underappreciated catalysts” could drive a “re-rating” of Apple’s stock, in his view, meaning that they could prompt investors to assign a higher multiple to the name. Apple remains Woodring’s top pick, and he boosted his price target to $180 from $175 in a Friday note to clients. Woodring sees pent-up demand for iPhones, a trend that could help spur a reacceleration in device shipments during fiscal 2024 that’s more robust than what’s currently baked into consensus expectations. Don’t miss: Marvell’s downbeat guidance wasn’t a big surprise — but these factors were Services growth could also pick up after a slowdown that’s “concerned” investors. “However, underlying this deceleration has been the most extreme FX …