KeyBanc remains bullish on Apple, stock offers ‘one of the best opportunities’

By Senad Karaahmetovic 

KeyBanc analysts reiterated an Overweight rating on Apple (NASDAQ:) stock after analyzing the latest spending data.

The analysts also reaffirmed the $177 per share price target and estimate as Apple remains “one of the best opportunities within our coverage given AAPL’s resilient product/ subscriber base, ability to grow key markets such as China and India, solid margin expansion potential and AAPL’s shareholder friendly capital allocation,” they wrote in a client note.

KeyBanc’s data shows Indexed Spending fell 11% month-over-month in January, which is better compared to the prior 3-year average of -13%.

“This is a continuation of better seasonal growth that we saw in January. Our data appears to be normalizing to historical seasonality as February is typically one of the slowest months of the year. Looking forward, we would expect the data to show m/m growth in March,” the analysts added.

Over the last 3 years, Apple’s F2Q Hardware is -31% quarter-over-quarter over the last 3 years. This compares to Street’s current consensus of -25%.

“We are seeing in our data consecutive months of better than historical seasonal growth, which would confirm our estimates. We believe the quarter more broadly is shaping up in line with Apple’s guidance: iPhone revenue should improve y/y from F1Q23, Mac/iPad should be down double-digits, and services should grow, but likely will decelerate, in our view. Additionally, we continue to be encouraged by third-party data points that suggest AAPL is gaining share in China,” they concluded.