Apple Inc. (AAPL) stock has been having an excellent 2017, posting steady gains in all but one trading day so far this year as the shares march on toward the “breakout year” predicted by Drexel Hamilton late last month.
One big question now is how long the shares can continue their steady upward march. Supply chain noise has been one factor holding back Apple stock, but as has long been the case with the Wall Street darling, analysts see plenty of upward catalysts coming up this year.
Additionally, there’s a bit of positive supply chain “noise” from one analyst this morning.
Apple Monitor Beats the Typical Seasonality
Drexel Hamilton analyst Brian White said in a research note on Jan. 9 that all of the companies in his Apple monitor reported better-than-usual sales for December. His Monitor includes key Taiwan-based suppliers for the iPhone maker. He said final December sales declined 2% month over month but beat the 11-year average of an 11% decline. This year’s decline was also a major improvement over the December 2015 decline of 31% month over month and is better than the five-year average of a 6% decline.
After including December, White said fourth quarter Apple Monitor sales grew 11% missing the 11-year average of a 19% sequential increase but better than the 7% increase in the December 2015 quarter. He also reminded investors that the Apple Monitor recorded its best September quarter ever in the third quarter.
Further, he said this was the first time the sales cycle for the Monitor flipped into the green in 12 months after marking a 19% increase year over year in December, versus a 15% decline year over year just the month before.
Apple Stock Still “underappreciated”
The analyst continues to see Apple stock as one of the world’s most “underappreciated” stocks. He continues to expect CEO Tim Cook to “make Apple grow again” in the December quarter thanks to the iPhone 7 and “a happy holiday season.” He also anticipates a strong iPhone 8 cycle in September and further “color on future innovations.” Another possible catalyst he sees for Apple stock is improved tax repatriation policies.
White highlighted that one big thing which came out of the Consumer Electronics Show las week was that “everything is becoming a computer.” In his view, Apple is the world’s only consumer-focused computer-related company that also develops software to work seamlessly with its hardware.
He also revived the Apple Car theme, noting that the self-driving car was also a key focus of CES this year. Automakers showed off Apple’s CarPlay, which is now available in more than 200 models offered by 40 different automakers.
Despite reports that the iPhone maker shifted its focus away from developing a full car to developing the underlying technology for a car, White sees an Apple Car becoming the “iPhone of the future.”