Apple Inc. (AAPL): Could Inventory Shortages and Delayed Cycle Actually End Up as a Positive? Top Analyst Says Yes

Here's why one of the Street's top analysts makes a bullish bet AAPL "can keep working" long after the initial launch days of the iPhone X.


As Apple Inc. (NASDAQ:AAPL) capitalizes on the attention of its “super cycle” for its sleek, shiny new iPhone X, one of Wall Street’s best performing analysts is out asking, “What’s next?” for CEO Tim Cook and his groundbreaking tech empire?

Top analyst Michael Olson at Piper Jaffray makes a case for why the company “can keep working” its super cycle that he sees having evolved to a “super long cycle” now. For those left with apprehension that the AAPL machine will not be able to sustain its momentum past the launch’s initial buzz, the analyst notes that with a delayed launch that actually has not “played out as many had originally anticipated” coupled with supply shortages, this will actually bode well down the line for the company. Keep in mind, the cycle now has been “involuntarily elongated” for the rest of fiscal 2018.

Therefore, the analyst reiterates an Overweight rating on AAPL stock with a price target of $200, which represents a 17% increase from where the stock is currently trading.

Olson explains, “With all of the talk of a ‘super cycle,’ there has been an ongoing drumbeat of concern around the trajectory of AAPL shares as we move farther away from the launch of iPhone X. In our view, there are several reasons to believe that there is now less need for an imminent path to new innovation. Apple may be increasingly well positioned to experience a strong multi-year iPhone trajectory, not the short-lived ‘super cycle’ that was anticipated. We believe an elongated iPhone cycle in FY18, followed by a wider array of iPhone X ‘offspring’ in Fall-18, along with growing awareness and interest in augmented reality (fueled by developers populating app store with new use cases and, longer-term, addition of rear facing 3D sensor), will all push out the need for Apple to answer the question of ‘what’s next?'”

Moving forward, with the field of augmented reality as a prospective driver for more services gains for Apple for many years, the analyst continues to trumpet Apple’s gilded opportunity that lies ahead long past the buzz of its iPhone X introduction to the tech market.

Michael Olson has a very good TipRanks score with a 65% success rate and a high ranking of #100 out of 4,735 analysts. Olson realizes 17.4% in his annual returns. When recommending AAPL, Olson yields 19.3% in average profits on the stock.

When considering the consensus rating of an analyst pool from the last 3 months, Apple has magnetized a strong bullish camp here, with 25 bulls and only 6 neutral analysts on the sidelines. With a return potential of nearly 11%, the stock’s consensus target price stands at $187.47.

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