According to him, the Apple stock should be trading at prices nearly double where they are today after starting off 2023 with a sharp sell-off.
AAPL closed nearly 4% down on Tuesday as the company’s stock kicked off 2023 with fresh losses. AAPL ended the first trading day of the year at $125.07, its lowest price level in 18 months.
And as the tech giant’s stock sold off, the company’s market value sank by more than $85 billion to below $2 trillion. It was the first time since May 2022 that the iPhone maker’s market cap dropped below the $2 trillion market.
Apple’s consumers will come back
Amid risk markets weakness, AAPL declined more than the S&P 500 which closed 0.4% lower. The selling pressure for the tech stock intensified following reports the company had cut orders amid weak demand across its major markets.
But the Loup founder notes that Apple “is debatably one of the world’s greatest companies” and while his view isn’t investment advice, he still believes the stock should be at least at $250 by next year.
The analyst suggests AAPL is slightly undervalued at the moment, compared to the Price-to-Earnings (P/E) ratio of companies such as Coca Cola, Disney and Caterpillar. According to him, while the above examples trade at P/E multiple of 30, or 30x, Apple is trading at a 21 multiple.
About the company’s business and associated challenges, Munster told CNBC’s “Squawk Box”:
“Ultimately, consumers may delay for three, six, nine months, but they are going to come back. And they will be upgrading iPhones, Macs, and iPads and I think that’s something that investors can lean into.”
AAPL opened higher on Wednesday and was trading around $126.38 at 09:45 am ET.