What is up with Apple’s stock this week? Is it Warren Buffet announcing he’s adding Apple shares to his Berkshire Hathaway fund? Is it the new flexible, organic LED screen? The relative strength index on Apple shows it is way beyond overbought. But on Thursday, valuation experts at Florida-based ValuEngine said the Cupertino tech toy was a buy.
One story pushing the stock skyward may be based on a Feb. 28 story in the Wall Street Journal that says new iPhones will have flexible screen technology. If you’re an Apple fan, that means everyone will rush to buy a new device because of its new design, even if it costs them a month’s rent.
“This (news) is especially important for the firm given the fact that the latest model iPhone–the iPhone7, did not deviate that much design-wise from its predecessor and that impacted sales. Users saw less reason to upgrade,” says Steve Hach, a senior analyst for ValuEngine out of Melbourne, Florida.
Apple is also reportedly doing away with the home screen button on the front of the iPhone, bringing the device more in line with its Android competitors. Other nips and tucks are expected as well.
“This all provides a new illustration of the shifting sands at Apple. The company is no longer driving innovation in devices it invented or perfected, it is merely adapting the changes and features of competitors,” Hach says.
Hach notes that Apple may be maturing much in the way long-time rival Microsoft has. The iPhone is at risk of burn-out unless it innovates. The laptop market is not thriving and Macbooks are a tiny portion of that market. The new iPhone8 with organic LED screen is also a ridiculously high $1,000 device, according to guestimates out there now. This price will undercut sales in Latin America and China, two of Apple’s most important markets outside of the U.S. And in China, local brands are gaining traction, namely newcomers Huawei and Xiaomi.
The new iPhone reveal comes in September 2017.
ValuEngine’s proprietary valuation models recommend a buy. Analysts said this week that Apple is likely to outperform average market performance for the next 12 months.