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Apple's 'Anticipation Trade' Doesn't Trump Fundamentals, Deutsche Bank Says

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Analysts are expecting many investors to buy Apple Inc. AAPL 0.21%'s stock on an "anticipation trade" into the iPhone 7 launch later this year. However, experts at Deutsche Bank remain focused on the company’s long-term fundamentals, “which suggest top-line growth will be more challenging going forward."

In a reprt on Wednesday, the firm cited a few key inhibitors to Apple's long-term growth, including:

  • Slowing smartphone sales in developed markets, which seem close to saturation.
  • Elongating refresh cycles, which will put further pressure on the company’s expansion in developed markets
  • Lack of growth at the high end
  • Limited market share penetration in emerging markets, which are more cost-focused – not good for Apple and its high-priced products.

Related Link: Detwiler Fenton Says Apple's iPhone Is Headed For A 'Steep Sequential Decline'

Having said this, the analysts noted the stock's current valuation reflects both the long-term growth challenges and the "expectations for a trade into the iPhone 7 launch." Consequently, they reiterated a Hold rating and $105 price target on shares.

Shares of Apple closed up 0.21 percent at $107.13 on Wednesday.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

DateFirmActionFromTo
Apr 2016BarclaysMaintainsOverweight
Apr 2016BTIG ResearchMaintainsBuy
Apr 2016NeedhamInitiates Coverage onStrong Buy

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