Apple Inc. (NASDAQ: AAPL) saw its shares recover on Monday after a very positive Wall Street analyst research call. Jefferies had evacuated its positive bias earlier this year, but at a time when much of the decline had been seen. Now the firm has decided that investors should be buying Apple stock, and that is after a handy recovery.
Jefferies’ Peter Misek raised Apple’s stock rating up to Buy from Hold, and perhaps more importantly, the firm’s price target was raised to $600 from $425.
What has taken place is that Jefferies raised estimates for the next fiscal year after the firm met with Apple’s suppliers. The perception and takeaway was that there was a much better shift in the attitude toward and the perception of Apple products again.
Jefferies even sees better gross margins propping up earnings based on less price sensitivity. There is also still the larger screen iPhone model that has been rumored as well.
We would note that one of the biggest downgrades on Apple was back on January 24 and it was from Jefferies. That was when the firm took the rating down to Hold from Buy and slashed the price target to $500 from $800. That is when the stock fell to $442 from $500 after the earnings report, and shares are now back up at $490.
The long and short of the matter when it comes to this upgrade from Jefferies is that the round trip call offered now better entry or exits points in the long-haul basis, although this is a significant bias change that did matter before.
We would not praise any call of this matter considering the past, but what stands out is that the momentum has been to the upside rather than to the downside as before. Now earnings will be only that much more important at Apple.