An Apple Inc
The Apple Analyst: Goldman Sachs analyst Michael Ng reiterated a Buy rating on Apple with a $294 price target.
The Analyst Takeaways: In February, foreign-branded phone shipments in China were up 9% year-over-year, Ng said in a new investor note.
This was a sharp increase from a 21% year-over-year decline in January 2025 for foreign-branded phone shipments in China.
"Though results will be impacted from potential inventory sell-in ahead of the release of the iPhone 16e, we remain encouraged with February 2025 marking the highest level of foreign-branded phone shipment growth since June 2024 (+12% yoy)," Ng said.
The analyst said that the overall mobile phone shipments in China for February were 19.7 million, which is up 38% year-over-year. The total came from Chinese branded phone shipments of 17.0 million (+44% yoy) and foreign-branded phone shipments of 2.6 million (+9%yoy).
The February figure was also one of the best month-over-month figures for China compared to the seasonal average for the month over the previous four years.
Ng said Apple got 51% of its fiscal 2024 revenue from iPhones, with the company dependent on smartphone upgrades. Longer replacement cycles due to macroeconomic headwinds and lackluster product innovation could hurt demand and overall iPhone sales, the analyst added.
The analyst also said Apple could see disruptions in its supply chain due to tariffs. "While Apple has a robust supply chain network, it may rely on one or a few key suppliers for unique or hard-to-manufacture at scale parts."
Ng said Apple's brand loyalty provides visibility into revenue growth with lower customer acquisition costs for new product and service launches and lower customer churn.
"We believe that the market's focus on slower product revenue growth masks the strength of the Apple ecosystem and associated revenue durability & visibility."
He said Apple stock is attractive based on a valuation compared to historical multiples.
"The durability of Apple's installed base and the resulting revenue growth visibility from attaching more Services and Products is what underpins the recurring revenue - or Apple-as-a-Service - opportunity."
AAPL Price Action: Apple stock traded at $222.30 on Tuesday versus a 52-week trading range of $164.08 to $260.09. Apple stock is down 8.8% year-to-date in 2025.
