While its peers in the technology industry are talking up “buzzwords” like artificial intelligence and cloud computing, Apple Inc. is chugging along with business as usual.
“Apple is the most ‘boring’ buy-rated stock,” Jefferies analyst Andrew Uerkwitz wrote Tuesday. But the company’s focus on consistent execution of its tried-and-true model is what makes Apple
AAPL,
so compelling, in his view.
See also: Apple has a juicy $40 billion opportunity ahead of it
What the smartphone giant “lacks in investor pizzazz, it makes up for with consistency,” Uerkwitz continued. “Its moat has been, remains and will be its ability to integrate software services with its hardware that builds a regular replacement cycle, ability to slowly raise prices, and take share.”
His commentary came as Apple gears up for earnings, which could show “anemic” top-line growth after two quarters of year-over-year revenue declines.
Uerkwitz projected that the company racked up $83.6 billion in revenue in its June quarter, compared with $83.0 billion in the year-prior period. His estimates went against the consensus view, which called for a decline in revenue to $81.7 billion.
Even so, he said he isn’t sensing much enthusiasm as Apple stares down slow growth. “In our conversations with investors, we hear little excitement on growth prospects with a focus on the predictability and resilience of service growth,” Uerkwitz wrote.
Don’t miss: Why this Apple bull is showing some caution
Could Apple shed its “boring” reputation and spice up its story down the line? That concept might garner some attention on the earnings call as analysts get their first crack at Apple executives following the reveal of the Vision Pro virtual-reality headset in June.
More from MarketWatch: Apple CEO Tim Cook has not answered the $1 billion question about his Vision Pro VR headset
“We expect analysts will focus their questions on new growth levers,” namely Apple Vision and A.I., “while also ensuring services will remain a growth vector,” Uerkwitz wrote.
In the here and now, however, “this earnings call will bring us back to the reality of iPhone and services being the two most important drivers of the stock,” he noted.
Uerkwitz reiterated a buy rating on Apple shares while boosting his price target to $225 from $210 and calling the stock “a source of safety in uncertain economic conditions.”
Read this next: Buy Apple’s stock because it’s more than just a hardware play, Citi says
Read the full article here
