Bernstein says ‘be like Buffett’ and buy Apple shares while they are cheap, upgrades to outperform April 29,2024

https://www.cnbc.com/2024/04/29/bernstein-says-be-like-buffett-and-buy-apple-shares-while-they-are-cheap-upgrades-to-outperform-.html

Bernstein upgraded shares of Apple on Monday, saying they had fallen too far on fears of sluggish iPhone 15 sales and overall weak revenue in China.

The firm, which has been on the sidelines for Apple with just a market perform rating for more than two years, advised investors to “be like Buffett” and scoop up the shares while they are cheap.

Bernstein upgraded Apple to outperform from market perform and kept its $195 price target, representing 15% upside from here.

The stock is down 12% this year, compared to a 6.9% gain for the S&P 500, over fears that it is losing market share in China amid further restrictions by the government there.

Bernstein notes that following this year’s losses, Apple is trading at a price to earnings ratio of 26.4 based on its 2024 earnings estimate and just 22.9 times its 2025 estimate. Bernstein displayed a table in the note to clients that shows Buffett tends to trim the shares when its price to earnings ratio gets above 30 and he buys more during quarters when the valuation is around the current range.

We believe prevailing weakness in China is more cyclical than structural, and note that historically Apple’s China business has exhibited much higher volatility than Apple overall, given its very feature-sensitive installed base,” stated the analyst.

“We further believe that replacement cycle tailwinds and incremental generative AI features set up Apple well for a strong iPhone 16 cycle

Calling it very bullish.

And this.

Cramer says Apple’s Monday rally doesn’t have ‘staying power’ after analyst upgrade April 29,2024

https://www.cnbc.com/2024/04/29/cramer-says-apples-monday-rally-doesnt-have-staying-power-.html

And yet the put call open interest ratio for May 3,2024 contracts are at the 0.58 level or definitely bullish.

Calls it is ?

The decrease in China sales is already priced in the stock. So even if they mention a decline in China sales the stock could still bounce if guidance and earnings are good.

Narrow earnings beat, moderate to strong guidance because of the iPad refresh coming shortly after. Artificial Intelligence will be mentioned.

It’s all about the guidance .

Unlikely to rocket but +3-5% seems reasonable barring a surprise.