Apple iPhone Sales May Disappoint. Buy the Stock Anyway.

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KeyBanc Capital Markets is telling

Apple

shareholders to look beyond any near-term hiccups in iPhone sales because the company’s long-term fundamentals remain robust.

Analyst Brandon Nispel reiterated his Overweight rating for

Apple

stock (ticker: AAPL) and reaffirmed his $180 price target for the shares.

In early trading Monday, Apple shares traded down 0.2% to $172.16.

In a Sunday note, the analyst cited his firm’s recent credit card data, which showed spending for Apple products was down 18% month-over-month in April, compared with a three-year average of 4% growth month-over-month. He cautioned it was only one month of data, but expects Apple’s June quarter product revenue to come in below Wall Street expectations.

But Nispel is optimistic Apple’s user growth and ecosystem will drive the company’s profitability and growth over time. Earlier this year, Apple announced its installed base surpassed two billion active devices. During the earnings call for its fiscal second quarter, management also said paid subscriptions across its platform—including Apple Music, Apple TV+, and iCloud—had reached 975 million, double the level from three years ago.

“Our data is telling us we should expect below average growth in C2Q23 [June quarter],” he wrote on Sunday. “We’re NT cautious but LT positive as we believe the user growth and capital return story continue to play out.”

Apple reported better-than-expected fiscal second-quarter earnings results earlier this month. The company also authorized an additional $90 billion stock buyback and increased its dividend for the 11th consecutive year, while vowing more annual increases going forward.

Wall Street is generally positive on Apple stock. According to FactSet, 76% of analysts covering the company have ratings of Buy or the equivalent on shares, while 19% have Hold ratings.

Apple stock has rallied about 17% over the past 12 months, while the

Nasdaq
has risen 4%.

Write to Tae Kim at [email protected]