Apple Maintains Hold Rating Amid Mixed Performance and Cautious Outlook

In a report released yesterday, Tom Forte from Maxim Group maintained a Hold rating on Apple (AAPL – Research Report), with a price target of $178.00.

Tom Forte has given his Hold rating due to a combination of factors impacting Apple’s performance and outlook. Despite a slight outperformance in second-quarter fiscal year 2024 sales and earnings per share compared to expectations, Apple’s iPhone sales have declined year-over-year, which aligns with the consensus. Additionally, while Services revenue experienced growth above consensus, the overall hardware sales decline could potentially slow down the growth of service revenues in the future. The company’s reliance on iPhone sales, the downward trend in hardware, and the dependency on the Chinese market are areas of concern.
Furthermore, the guidance for third-quarter fiscal year 2024 suggests only a low-single-digit sales growth, which, although higher than consensus, still reflects a cautious outlook. Apple’s announcement of an increased share buyback program and a dividend hike shows strength in returning value to shareholders, yet the high price-to-earnings multiple in relation to the projected low growth remains a key worry. These aspects collectively underpin Forte’s decision to maintain a Hold rating on Apple’s stock with a 12-month target price of $178.

According to TipRanks, Forte is a 5-star analyst with an average return of 16.8% and a 54.45% success rate. Forte covers the Consumer Cyclical sector, focusing on stocks such as Amazon, Beyond Inc, and The Lovesac Company.

In another report released yesterday, Rosenblatt Securities also maintained a Hold rating on the stock with a $196.00 price target.

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Apple (AAPL) Company Description:

Apple, Inc. designs, manufactures, and sells smartphones, personal computers, tablets, wearables and accessories. It also offers a range of related services. Its products include iPhone, Mac, iPad, Apple TV, Apple Watch, Beats products, HomePod and AirPods. The services segment is comprised of AppleCare, cloud services, digital content offerings like the App Store and other content services like Apple Arcade, Apple Music, Apple News+, Apple Fitness+ and Apple TV+, payment services such as Apple Card and Apple Pay as well as advertising and licensing services. The company was founded by Steven Paul Jobs, Ronald Gerald Wayne, and Stephen G. Wozniak on April 1, 1976 and is headquartered in Cupertino, CA.