Apple Stock Price Forecast December 2021 – Time to Buy AAPL Stock?

While the US stock markets plunged yesterday, Apple (AAPL) stock bucked the trend and rose over 3%. The stock is now up 24.6% for the year and is now outperforming the S&P 500 after having underperformed the broader markets for the most part of the year.

Apple has reclaimed its title as the world’s largest company by market cap after briefly losing out to Microsoft. Apple is now the second-best performing FAANG stock of 2021 behind Alphabet. What’s the forecast for AAPL stock and is it a good buy for December?

Apple stock technical analysis

Apple stock is looking in a technical uptrend and has been hitting new highs. The stock trades above all key moving averages and is trading near its all-time highs. The 12,26 MACD (moving average convergence divergence) also gives a buy signal. However, after the recent rally, the stock looks overbought in the short term and has a 14-day RSI (relative strength index) of 71.3. RSI values above 70 indicate overbought positions while values below 30 signal oversold positions.

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AAPL stock recent developments

Apple has been in the news over its AR/VR headset which is expected to be launched sometime in 2022. Analyst Ming-Chi Kuo of TFI Asset Management has predicted that Apple would launch computerized glasses by the end of 2022 and believes that it would be as powerful as the Mac. While Kuo has a good track record in predicting Apple products, his prediction of the Apple iPhone 13 featuring satellite connectivity did not turn out to be true. Satellite connectivity company Globalstar had rallied on rumors of it being the partner for Apple’s satellite phone.

Apple stock forecast

Wall Street analysts are generally bullish on Apple stock. It has received a buy or equivalent rating from 31 of the 41 analysts polled by CNN Business. Nine analysts rate it as a hold while one analyst rates the stock as a sell. Its median target price of $170 is a premium of just about 3% over current prices. The street high target price of $198 implies an upside potential of almost 20% from these levels.

Of late, Wall Street analysts have had a mixed opinion over Apple stock. While some turned bearish on the stock after its earnings miss and see supply chain bottlenecks taking a toll on its performance, others are not too perturbed. Also, while many analysts are bearish on the prospects for iPhone 13 after strong sales of iPhone 12, many others believe that the consensus view on iPhone 13 is quite bearish and the sales could end up surprising on the upside.

Meanwhile, some analysts believe that Apple has mostly addressed the supply chain issues that cost it $6 billion in lost sales in the fiscal fourth quarter of 2021. Notably, after the sales miss, Apple momentarily lost its position as the world’s largest company.

AAPL stock long-term forecast

Apple is among the stocks that you can hold for a lifetime. It’s the largest holding for Berkshire Hathaway and the conglomerate is the second-largest shareholder in the iPhone maker. While Warren Buffett largely stays away from tech companies, he made an exception for Apple. Meanwhile, Buffett does not see AAPL as a tech company but as a consumer products company. Incidentally, he also switched to an iPhone last year.

Over the long term, Apple’s entry into electric cars could drive value for investors. The total addressable market for mobility is much larger than Apple’s current addressable market. Tesla’s soaring market cap is reflective of the valuation premium that markets are willing to pay for quality EV names. Many Tesla bulls like Gene Munster and Adam Jonas believe that Apple’s entry into EVs poses a risk for incumbents like Tesla.

Also, the increase in Apple’s services revenues would support the company’s margins and valuations. AAPL is among those stocks that can be part of your core portfolios. While there could be short-term hiccups, as we saw in 2021 amid the supply chain issues, it can deliver market-beating returns in the long term.

Apple stock target price

Needham analyst Laura Martin believes that the rise in Apple stock amid the sell-off in other tech names is a sign that investors are pivoting towards quality companies with strong balance sheets. AAPL is sitting on a massive cash pile and has been using most of it for share buybacks. She believes that AAPL would continue to repurchase 3-4% of its outstanding shares every year for the next five years. Buffett also explained how the company’s stake in AAPL stayed intact despite selling shares. As the company repurchases shares, the outstanding float comes down and existing investors end up owning a larger chunk of the company.

Last month, JPMorgan had reiterated Apple stock as overweight. “Despite the moderation in lead times as supply improves, it remains stable in the US ‒ indicating solid demand trends, and it remains the most elevated on a geographic basis in China ‒ indicating much higher than anticipated demand, which bodes well for interest/demand for the iPhone 13 series in aggregate globally relative to investor expectations for a softer volume cycle than the iPhone 12 series,” it said in its note.

Should you buy AAPL stock?

AAPL stock trades at an NTM (next-12 months) PE multiple of 29x which is higher by historical standards. However, it has seen a rerating over the last couple of years as markets value it like a software company now and not a hardware company.

Meanwhile, the spread of the Omicron variant of the coronavirus could pose supply chain risks for Apple. However, it would only increase the pace of digitization of which AAPL has been a prime beneficiary.

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