Apple in trouble: why despite optimistic predictions it faces a complex outlook

That outlook already appears to be built into Apple AAPL’s share price, Morgan Stanley’s Erik Woodring wrote in a note to clients on Monday, but he still sees a “complicated setup” in light of recent market volatility.

Morgan Stanley cut its price target on the stock to $210 from $220 on Monday, expecting Apple to give a disappointing forecast when it reports its results.

Against that backdrop, Apple was named a top pick for 2024 at Bank of America due to optimism about the iPhone maker’s upcoming results as well as its longer-term prospects. Following Morgan Stanley’s comment, the firm’s shares fell 0.3% and accumulated a red mark of 4% in the last week.

The company has “a catalyst-rich path with defensive cash flows” wrote analyst Wamsi Mohan, who has a buy rating and a $225 price target on the stock.

Apple: what to expect for the stock

Apple’s second-quarter results are scheduled for release next week, and BofA is mostly positive about the outlook, with “service revenue growth and margins that remain strongHowever, he warned that “the demand environment is weak and lower guidance for F2Q could influence a pullback in stocks.”

Apple shares rose 1.22% on Monday to $167.02. The stock is coming off its lowest close in about a year, as well as a five-day drop of 6.5% that wiped nearly $180 billion off its market capitalization. The stock is down 14% this year, making it one of the worst performers among large-cap technology companies.

“This appears to be already built into the price, but in today’s volatile market, it’s a complicated setup,” analyst Erik Woodring wrote. The firm recommends buying on post-earnings weakness, given an upcoming Apple event focused on artificial intelligence.

The company has “a catalyst-rich runway with defensive cash flows,” wrote analyst Wamsi Mohan, who has a buy rating and $225 price target on the stock.