(Bloomberg) -- Apple Inc. was upgraded to buy from neutral at BofAML, which wrote that it saw “ten reasons to be bullish” on the iPhone maker. It also raised its price target to $210 from $180.
Shares rose 2.1 percent, taking the stock to its highest level since December.
The firm's 10 reasons touched on a number of factors, including valuation, an “overshoot in negative estimate revisions,” a reacceleration in the company's services division and a growing base of users. The company has a “highly loyal user base,” with “low churn where demographic changes are in Apple's favor,” analyst Wamsi Mohan wrote.
The firm was also positive on the company's critical iPhone line, which has been the subject of investor anxiety given demand issues, particularly in China. BofAML now forecasts “stability of supply chain order cuts,” as well as a “large reversal of inventory overhang in iPhones.”
The lower inventory is “a net positive, which after [the first quarter of 2019] could start to drive some stability in supply chain orders with new builds picking up after the next few months.”
Shares of Apple have gained more than 20 percent from a January low, though they remain more than 25 percent below a record hit in October, a pullback that BofAML wrote “presents opportunity.”
According to Bloomberg data, BofAML's call marks the first Apple upgrade since New Street Research raised its view on the stock in early January.
To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm
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