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Apple stock has more than 40% upside, analyst says

Apple stock has more than 40% upside, analyst says

Apple’s (NASDAQ: AAPL) stock price correction is a buying opportunity for new investors as the tech giant is set to post robust financial results this year, according to Wedbush analyst Dan Ives.

The latest sell-off, which has erased almost 15% of AAPL stock value from an all-time high, has entirely been backed by rising bond yields and investor’s shift towards underperforming value stocks.

On the positive side, the recent sell-off along with robust December quarter financial numbers have also helped in soothing Apple’s stock price valuations.

Shares of Apple are currently trading around 32 times to earnings and 7 times to sales, down from the 2020 average of 40 and 8.47 times, respectively.

Apple stock performance. Finviz chart. See more stocks here.

Strong financial projections would support upside

Apple management hinted that December quarter growth would accelerate on the year and follow typical seasonality on the quarter. The Wall Street consensus revenue estimate for the March quarter is standing around $77 billion, representing a substantial growth from $58 billion in the year-ago quarter.  A recent report by Tipalti revealed that Apple makes an estimated $1,752 per second.

Strong iPhone 12 sales combined with rising volumes for computing products would add to revenue growth in the March quarter. On the other hand, the company has been working on boosting its margins and profits, further adding to its cash flow generation potential. The company expects double-digit earnings and cash flow growth for the March quarter.

Analysts price target and technical data indicates upside for Apple stock

Wedbush analyst Dan Ives provided a $175 price target for Apple stock, indicating more than 40% upside from the current level.

“The emotional bull/bear debate on tech valuations is not going to go away,” Ives writes, “but we believe the underlying fundamental stories and white-hot growth creates a yellow brick road to an upward bullish trend for the tech sector into the rest of 2021 despite the rotation/yield white knuckle worries abound on the Street seen this week,” Dan Ives said.  

Tradingview TA chart.

Technical factors are also supporting buying calls. Apple stock looks like a good stock to buy based on volumes and oscillators data.

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