A UBS investment firm stated that the stock of Apple seem to have a potential downside that is limited in the present trading price due to the iPhone businesses’ complete meltdown. It is believed by Steven Milunovich the Analyst m that a colossal meltdown is seen in regards to the iPhone akin to Blackberry’s failure, Apple’s trading should not go below the range of $95 and $105n that is presently there. The AAPL stock as per his view has a downside that is limited at its current price for their investors.
The current share price of Apple as per Milunovich reflects on the product cycle bare’s outlook. He also believes that the annual declines of the iPhone ranges between 5‐10%, this is very similar to the PC business, in his view the business outlook of the iPhone is said to be probably very negative.
For the Apple stock, the price target that has been maintained by UBS is $115, for the investors, this would be the buy rating. When the valuation was made, it was seen by Milunovich that Apple is a company that whose prime focus largely is service. The prediction made by the analyst is that Apple’s profitable hardware will continue to sell, however it will pivot to becoming a company that is service oriented. This will result in various products that are monetized like Apple Pay, App Store and Apple Music.
The Apple shares to move to and beyond $120, it is believed that Apple has to introduce new products and hardware which will resonate with their customers. Milunovich also believes that even if 25% success is achieved by the new products that Apple has launched just like the iPhones, then that can help pushing the stock price of the company between $130 and $150. He also forecasted on the growth of the iPhone sales by 2% for the 2017 fiscal year.
