Look for Apple Inc. (AAPL) Super Upgrade Cycle to Whirl Right Into Fiscal 2018, Predicts Jim Suva

Citigroup's Jim Suva is bullish on Apple's "attractive valuation" and makes a strong case for why shares will move up next year.


It is no secret that Apple Inc. (NASDAQ:AAPL) stock has had a great 2017, captivating the Wall Street grapevine with iPhone X launch buzz. However, can the big Apple machine keep the momentum revved up through the new year?

Citigroup analyst Jim Suva is counting on it, praising the tech titan’s compelling stock value and spotlighting continuous “positive tailwinds for Apple’s fundamental growth drivers.”

Though the analyst acknowledges an atmosphere of moderating smartphone growth, Suve is betting on the titan’s shares taking off further come 2018.

As such, the analyst maintains his Buy rating on AAPL stock with a $200 price target, which implies a close to 16% upside from where the stock is currently trading. (To watch Suva’s track record, click here)

Suva boils down his confident case for a gains-making 2018 for Apple into five key reasons:

  1. “Super upgrade cycle continues into FY18 as production issues have resulted in elongated lead times vs prior cycles, thereby likely to drive better than seasonal demand in March quarter.”

 

  1. “Tax reform benefit from reduction in corporate taxes and cash repatriation.”

 

  1. “Sticky User Base Which Drives Continued Services Revenue Growth … continued momentum in mobile commerce, mobile gaming, mobile entertainment will continue to drive sticky services revenue growth.”

 

  1. “Enterprise Push Mid Term, Applewood Longer Term … enterprises are spending more efforts to upgrade mobile device hardware which is positive for Apple. Longer term we believe Applewood (Apple’s move to gain traction in India & more services) will eventually become material.”

 

  1. “Attractive Valuation – Shares are trading at a 20% discount to the SP500 in line with their 5 year median despite improving fundamentals described above.”

TipRanks points to a strong analyst bullish consensus backing this tech empire, with 23 of 29 analysts in the last 3 months rating a Buy on Apple stock and just 6 maintaining a Hold. With a return potential of 10%, the stock’s consensus target price stands at $189.89.