Research firm Drexel Hamilton has released a research note that says Apple Inc. (NASDAQ: AAPL) is “one of the most underappreciated stocks in the world.” Given that it is the world’s most valuable company based on market cap, and one of the world’s two or three most famous brands, the position seems hard to defend.
According to a Barron’s post, Drexel Hamilton analyst Brian White wrote:
Last week, the smartphone lost its cachet at Mobile World Congress (MWC) as Samsung Electronics (005930KS) shifted the timing of its traditional Galaxy UNPACKED event until March 29 and overall market growth has slowed. In past years, MWC was focused on the smartphone and Samsung has historically used this venue to introduce its flagship Galaxy “S” phones; however, not this year. That said, new smartphones were unveiled by a host of other smartphone vendors; however, nothing that makes us concerned with Apple in 2017 and especially with the major upgrade we expect with the iPhone “X”. Given the plethora of media reports indicating that Apple could introduce advanced 3D sensing technology with the iPhone “X” this fall, we took another look at Lenovo’s Phab 2 Pro with Google Tango at MWC that we believe offers a taste of what is possible in the world of augmented reality (A/R). We believe the addition of advanced 3D sensing to the iPhone could peak the consumer’s curiosity and drive a strong upgrade cycle.
Does that mean the upcoming iPhone is appreciated, but the stock is not?
Apple’s shares actually have been very visible. They have advanced more than any other Dow component this year, up 20.1% to $139. The Dow Jones Industrial Average has risen 5.6% over the same period to 20,903.
Apple’s current market cap is $730 billion, well ahead of number two Alphabet Inc. (NASDAQ: GOOGL) at $596 billion.
The “underappreciated” stock’s advance has been driven by an extraordinary amount of market coverage about the features and sales of the new iPhone 8, the most appreciated new consumer electronics product in the world.