Apple Inc., (NASDAQ: AAPL) may benefit from an iPhone upgrade push, according to one sell-side analyst, but another downgraded the stock Wednesday on concerns about the company’s move away from an iPhone focus toward services and streaming TV.
Bank of America Merrill Lynch’s Wamsi Mohan reiterated a Buy rating on Apple and raised the price target from $210 to $220.
HSBC’s Erwan Rambourg downgraded Apple from Hold to Reduce with a price target lifted from $160 to $180.
Apple’s iPhone trade-in program, which lowers the effective cost of upgrading to a new iPhone, targets what BofA’s research finds are the most commonly owned iPhones, meaning the program could lead to a large number of upgrades, Mohan said in a Wednesday note.
A boost in upgrades would be welcome at Apple, which has seen a slump in iPhone sales growth, the analyst said.
Apple’s stock remains inexpensive, and the company has shown it can grow revenue consistently, Mohan said.
Apple is only at the beginning of what may be a long ramp in a move to services, which the company has targeted as a big part of its business, according to BofA.
HSBC’s Rambourg is concerned that Apple’s move to services could have lower margins and raised questions about whether the company’s recently announced plans for a streaming TV service may lag expectations, according to CNBC.
Apple shares were down 0.33 percent at $198.85 at the time of publication Wednesday.
Photo courtesy of Apple.
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