Apple Stock Has 35% Upside, According to 1 Wall Street Analyst

Shares of Apple (NASDAQ: AAPL) are down 13% year to date. The company is facing several headwinds right now, including weak iPhone sales in China and increased regulatory scrutiny in the U.S. and Europe.

Despite these headwinds, Wells Fargo has an overweight (buy) rating on the shares with a $225 price target. That's 35% higher than Apple's current share price of $166.90.

Is Apple stock a buy?

In the company's fiscal 2024 first quarter (ended Dec. 30, 2023), iPhone sales grew in every region except China. But analysts expect Apple to report a 5% year-over-year decline in revenue for the fiscal second quarter.

Apple is expected to launch generative artificial intelligence (AI) features for iOS later this year, which could stimulate iPhone demand, but investors are worried about the cost of these new features. Analysts expect Apple to post earnings per share of $1.50 for fiscal Q2, slightly down from $1.52 in the year-ago period.

Another cloud hanging over Apple stock right now is regulation. In March, the Department of Justice filed a lawsuit alleging that Apple is monopolizing the smartphone market with certain contractual restrictions placed on app developers. Meanwhile, the European Union is trying to force Apple to offer users alternative ways to buy content in the App Store.

Overall, these headwinds may continue to negatively impact investor sentiment around the stock in the near term, but these issues don't impact the value of Apple's brand.

The stock's valuation still isn't cheap on a price-to-earnings basis, and with Apple likely facing another quarter of soft iPhone sales, investors shouldn't expect the stock to reach the analyst's price target anytime soon. However, stronger iPhone sales in calendar 2025, especially if Apple releases new AI features, may be the catalyst that sends the share price higher.

Should you invest $1,000 in Apple right now?

Before you buy stock in Apple, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of April 22, 2024

Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.