Apple Stock Rebounds, Strongest Day Since 2018
Shares in Apple surged 6.9 per cent on Monday, assisted by a broad Wall Street rebound and an upgraded rating from an analyst who said the tech giant’s stock had become oversold after last week’s defeat related to coronavirus concerns.
Oppenheimer upgraded its rating on Apple from ‘perform’ to ‘outperform,’ saying the California-based company was more prepared to absorb the impact of the global health crisis than its competitors.
Apple’s stock tumbled over 16 per cent from its record high on 12 February through Friday. Monday’s hike placed Apple’s stock on track for its largest one-day gain since December 2018.
The company is heavily dependent on China, where the coronavirus has struck the production of its products in factories and kept consumers away from its retail shops.
‘Our limited checks indicate Apple will prove more resilient than others as firms worldwide navigate changing supply chains and customer demand uncertainty,’ Oppenheimer analyst Andrew Uerkwitz wrote in a client note.
The Philadelphia Semiconductor Index .SOX, which includes the stocks from many of Apple’s suppliers, also saw an increase, rebounding 1.9 per cent. Semiconductor companies rely on China for their sales more than most other US companies.
More broadly, the S&P 500 jumped 2.8 per cent as investors expected that monetary stimulus from central banks would help soften the blow of the economic impact from the coronavirus.
Increasing optimism about Apple’s increasing focus on recurring revenues from services include videogames, video and music have hiked up its stock by 66 per cent over the past year, even after last week’s selloff.
The shares are now trading at about 19 times expected earnings, down from a decade-high PE ratio of over 23 in mid-February, according to Refinitiv Datastream.