Goldman Sachs says Apple stock will soar 32% over the next year with the market currently underestimating the stickiness of its product ecosystem
stock has 32% upside thanks to the iPhone maker's services, brand loyalty, and sticky ecosystem.
"Apple's installed base growth, secular growth in services, and new product innovation should more than offset cyclical headwinds to product revenue, such as a reduced iPhone unit demand due to a lengthening replacement cycle and reduced consumer demand for the PC & tablet category," Ng said, initiating coverage with a buy rating.
Apple's valuation today is attractive compared to its own historical levels, as well as in relation to competing large-cap technology companies, in the firm's view. Not only that, but services that customers rely on from Apple are durable and necessary in the long run even as iPhone demand fluctuates.
"The durability of Apple's installed base, and the resulting revenue growth visibility from attaching more Services and Products is what underpins the recurring revenue - or Apple-as-a-Service-opportunity," Ng said.Morgan Stanley analyst Erik Woodring bumped his price target to $180 from $175
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