Muted expectations bode well for Apple shares, says Citi

Lowered consensus expectations for Apple, which are down 17% from a year ago, bode well for share price appreciation in the coming months, Citi analyst Jim Suva tells investors in a research note. The analyst expects tariffs and the broader global macro environment to weigh on iPhone unit sell through in December. However, price points will be more attractive on iPhone 11 versus its predecessor, which should help to provide some offsets, says Suva. Further, the analyst expects Apple's Services offerings to boost investor sentiment and he remains optimistic on Apple Arcade and Apple TV+. While Apple shares could see some profit taking in the near-term, the current valuation is "reasonable" given the mix shift towards higher margin Service offerings and the return to year-over-year growth in fiscal 2020, contends Suva. He maintains a Buy rating on Apple with a $250 price target. The stock closed Thursday up $$1.86 to $220.82.

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