APPLE
START - $232.50 | FINISH - $269.00
- HORIZON: 3 months (Short-term)
- FROM: 15-01-2025 | UNTIL: 14-04-2025
- MANAGEMENT ASSESSMENT: 15.70% growth
- RECOMMENDATION: BUY
TRADING PLAN
● Entry: Enter at or near $232.50 per share, considering recent consolidation near this level.
● Target: $269.00 by the end of the investment horizon, potentially reflecting a 15.70% upside from current levels.
WHY THESE SHARES HAVE POTENTIAL FOR PROFIT
- Ecosystem Dominance: Apple’s ecosystem combines hardware, software, and services seamlessly, retaining customers and cross-selling opportunities. Services such as iCloud, Apple Music, and the App Store now contribute over 25% of revenue, growing at double digits. In Q4 2024, Apple's services revenue amounted to $24.97 billion, accounting for 26.31% of total quarterly revenue.
- Strong Financial Performance: Apple’s balance sheet is stable, with over $60 billion in free cash flow, on average, annually. Its capital return program (dividends and share buybacks) remains a major draw for investors. Apple's annual free cash flow for 2024 was $108.807 billion, a 9.26% increase from 2023.
- Emerging Markets Expansion: Apple is gaining traction in emerging markets like India and Southeast Asia, supported by targeted product launches and local manufacturing efforts. Apple has begun assembling its latest iPhone 16 series in India, marking a significant goal as India narrows the production gap with China.
- Consumer Loyalty: With over 2 billion active devices worldwide, Apple enjoys unmatched customer loyalty, supporting recurring revenues from its services ecosystem.
INDICATORS
Technical indicators suggest a potential upside. The stock is consolidating near a support level at $236, which aligns with its previous high and key psychological region. Momentum indicators, such as the relative strength index (RSI), are approaching oversold territory (below 30), suggesting that selling pressure may be fading. A bounce from this level could signal a reversal in momentum, supported by increased trading volumes around the support zone.
RISKS
- Economic Sensitivity: As a premium brand, Apple is exposed to macroeconomic slowdowns, which may impact consumer spending.
- Regulatory Challenges: Increasing scrutiny of App Store policies and global competition laws could introduce new challenges.
- Supply Chain Dependencies: Geopolitical tensions with China, a key manufacturing hub, could disrupt supply chains or increase costs.
Disclaimer:
*Any opinions, views, analysis, or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability, or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from the use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorised financial services provider FSP No. 51404.
** This article was prepared by BROKSTOCK analyst Maboko Seabi
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