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Investors should buy Apple stock on the big dip, according to D.A. Davidson.
The firm's analyst Tom Forte reaffirmed his Buy rating and $280 price target for smartphone maker's shares, citing its inexpensive valuation.
"We believe the near-term challenges, including lower unit sales in emerging markets, are more than priced into shares," he wrote on Friday. "In fact, as Apple is able to further show its ability in mitigating tariff risks, we think the shares at current levels provide an attractive buying opportunity."
Apple (AAPL) stock was up slightly to $156.75 on Friday. Its shares have dropped nearly 30% since the end of October, as concerns mounted about weak demand for the newest iPhone models, amid guidance warnings from several component suppliers.
The analyst noted even in a bad scenario where the trade conflict between the U.S. and China escalates, Apple can move its production outside the Asian country. He also said the company may increase its stock buyback plans and raise its dividend.
Meanwhile, Apple could still find new avenues of growth that will help boost its share price next year.
Earlier this month, Barron's suggested that Apple may want to offer an all-in-one hardware and software subscription offering to stabilize annual revenue and appease investor concern over the cyclical nature of iPhone product launches.
A couple of weeks ago, Barron's also put Apple stock on its Top 10 Stock Picks for 2019 list, citing its attractive valuation.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.