Drexel Hamilton Highlights Buying Opportunity for Apple Inc. (AAPL) in Light of FANG Run-Off


Apple Inc. (NASDAQ:AAPL) shares are stumbling almost 4% today, on top of a subsequent 4% slip on Friday, despite all the buzz from its annual Worldwide Developers Conference last week. What is the theory for this sudden loss in momentum for the tech giant? Drexel Hamilton analyst Brian White believes the “stock was hijacked” due to a wind of wariness closing in on the high performing technology, or “FANG” stocks.

Noting investors have been swept away by “concerns that the leading technology stocks have run too far this year and a comparison to the ‘FANG’ stocks,” one investor’s apprehensive position is another’s golden prospect, which is precisely how White views the short-term share weakness. As such, the analyst reiterates a Buy rating on shares of AAPL with a $202 price target, which represents a just under 401% increase from where the stock is currently trading.

White explains, “In our view, Friday’s sell-off in Apple represents yet another buying opportunity as investors turn their focus to the iPhone 8 this fall, along with the company’s raised capital distribution initiative, depressed valuation and new innovations. We continue to believe Apple remains among the most underappreciated stocks in the world.”

In fact, “In our view, comparing Apple to the mega-cap Internet players is a specious argument given the significant outperformance by this group relative to Apple over the past five years, not to mention the valuation differential,” elaborates the analyst, going as far as to assert, “This is like comparing Apples to Oranges.”

Unfazed by “FANG” fears, the analyst sees here “just an undervalued Apple” still king of the tech verse, concluding, “With the expanding capabilities of Apple’s ecosystem, we believe this positions Apple very well to capitalize on the trend toward more ‘things’ becoming a computer.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Brian White is ranked #212 out of 4,570 analysts. White has a 61% success rate and earns 9.8% in his annual returns. When recommending AAPL, White realizes 23.9% in average profits on the stock.

TipRanks analytics show AAPL as a Strong Buy. Based on 31 analysts polled by TipRanks in the last 3 months, 26 are bullish on Apple stock while 5 remain sidelined. The 12-month average price target stands at $164.93, marking a nearly 15% upside from where the stock is currently trading.