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Apple Stock ‘Is Still Undervalued,’ Says RBC Analyst


Jan. 14 2019, Updated 1:19 p.m. ET


Tech giant Apple’s (AAPL) stock managed to remain in positive territory in the week ended January 11. Last week, the stock rose 2.7% against 2.5%, 3.5%, and 2.4% gains in the S&P 500 Index (SPY), the NASDAQ Composite Index (QQQ), and the Dow Jones, respectively. However, Apple stock turned negative again today. At around 11:46 AM ET, it was trading with 1.6% day losses, below the $150 psychologically significant level.

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Is Apple undervalued?

Over the last couple of months, many Wall Street analysts have expressed their concerns about Apple’s falling sales in China. Earlier this month, Toni Sacconaghi from the research firm Bernstein even said, “Apple is not that inexpensive,” CNBC reported.

In contrast, analysts at RBC called the stock undervalued. RBC, in a recent note, said, “We think investors are better off remaining positive here given attractive valuation and high probability for services to re-accelerate later in 2019 via new offerings,” CNBC reported. The report added that RBC believes AAPL “is still undervalued given its more than $126 billion in net cash, giving it a base case of $185 per share.”

Will it help the stock recover?

Today’s pessimism in Apple stock is partly driven by the negative broader-market sentiment due to a lack of any positive updates on the US–China trade talks. Nonetheless, RBC analysts’ view could help Apple bulls remain optimistic in the coming sessions.

Last week, other tech stocks Facebook (FB), NVIDIA (NVDA), Amazon (AMZN), Netflix (NFLX), Microsoft (MSFT), Qualcomm (QCOM), and Tencent Holdings (TCEHY) rose 4.2%, 9.3%, 4.1%, 13.4%, 0.9%, 1.6%, and 3.7%, respectively. Alphabet (GOOG) lost 1.3%.


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