products in the U.S. declined in January, but there are other reasons the stock could rally further, according to KeyBanc Capital Markets.
Analyst Brandon Nispel wrote in a note on Tuesday that an analysis of 1.8 million unique U.S. credit and debit card customers’ transactions showed a 28% decline in hardware spending in January from the previous month, when looking at
purchases above $399. However, the falloff from December is still an improvement from the prior three-year average decline of 36% in January.
Nispel, who has an Overweight rating and $177 price target on Apple stock, says the data suggest supply disruptions in China that weighed on sales in the December quarter led some consumers to buy Apple hardware in the current quarter instead. The analyst also notes that Apple has been upbeat about sales in China and India, which could signal significant growth ahead for the firm.
Apple stock was down 0.4% to $153.27 in recent Tuesday trading. Shares are up 18% year to date.
“We continue to believe that [Apple] remains highly resilient to the macro [environment] as the user base continues to grow and recently surpassed [two billion],” Nispel wrote. “We believe a catalyst for that growth could be around China reopening and recent reports suggesting retailers are discounting the iPhone. Further, AAPL’s margins continue to improve with mix shift and higher levels of iPhone sales in international markets.”
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