Barclays lifts Apple stock price target to $197 from $183

On Friday, Barclays (LON:BARC) raised its price target on Apple Inc (NASDAQ:AAPL) shares to $197 from $183, while keeping an Underweight rating on the stock. With a current market capitalization of $3.57 trillion and a P/E ratio of 39.24x, InvestingPro analysis suggests the stock is trading above its Fair Value. The adjustment comes after Apple’s recent quarterly report, which matched overall expectations, bolstered by strong Services and Mac sales that helped to balance weaker iPhone revenue. Barclays analyst noted that revenue from China did not meet the consensus estimates, attributing approximately half of the shortfall to reductions in iPhone channel inventory.

The operational expenses for the quarter were reported at $15.4 billion, aligning with Barclays’ forecast and falling within Apple’s guided range of $15.3 billion to $15.5 billion. Gross margin and operating margin were slightly higher than anticipated. The non-GAAP earnings per share (EPS) was $2.40, surpassing both Barclays’ prediction of $2.33 and the consensus of $2.35. InvestingPro data shows Apple maintains strong financial health with a 46.21% gross profit margin and generates substantial free cash flow of $108.8 billion.

Looking ahead, Barclays’ projections remain largely unchanged. The firm continues to anticipate sales of 51 million iPhone units for the March quarter. Barclays also expects new features related to Apple Intelligence and additional language support to roll out in April. However, the firm expressed ongoing concerns about several factors, including the potential risks in the Chinese market, regulatory challenges in Services, particularly related to Google (NASDAQ:GOOGL)’s Traffic Acquisition Costs (TAC), the slow adoption of artificial intelligence technologies, and subdued expectations for the iPhone 16 series.

The analyst concluded by maintaining the Underweight rating, indicating caution despite the recent government stimulus in China and the company’s solid performance in certain product categories. InvestingPro subscribers can access over 30 additional financial metrics and insights, including detailed valuation analysis and growth projections, through the comprehensive Pro Research Report available for Apple and 1,400+ other US stocks.

In other recent news, Apple’s financial performance has been the subject of multiple analyst reports. JPMorgan analyst Samik Chatterjee raised the price target for Apple’s stock to $270, maintaining an Overweight rating, based on the company’s optimistic guidance for the March quarter. BofA Securities also increased its price target on Apple’s stock to $265, maintaining a Buy rating, citing the company’s strong performance in certain regions due to the introduction of Apple Intelligence.

UBS reiterated a Neutral rating on Apple’s stock, maintaining a price target of $236, following a slight decline in the company’s iPhone revenue. TD Cowen analysts, however, raised their price target on Apple’s stock to $290, citing steady demand trends in China and the successful rollout of Apple Intelligence. Piper Sandler maintained a Neutral rating on Apple’s stock, with a consistent price target of $225, highlighting challenges with iPhone revenue and performance in China.

Despite varying perspectives, the common thread among these recent developments is the anticipation of Apple’s future performance, particularly in relation to its operations in China and the impact of new product introductions. The company’s financial health, as well as its ability to navigate complex market dynamics, are key factors that will continue to shape investor sentiment.

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