Is Apple stock a buy amid improving iPhone supply this holiday season?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Nov 27, 2021
  • Apple shares edged lower 2% on Black Friday.
  • The company’s iPhone supply is seen improving according to reports.
  • This holiday season could be a significant boost for the stock price.

Apple Inc.’s (NASDAQ:AAPL) iPhone is certainly one of the most perfect Christmas gifts to give this holiday season, following the release of the iPhone 13. After some concerns about ongoing shortages in the semiconductor industry, some reports suggest iPhone supply is seen improving this holiday season.

Therefore, the iPhone maker could experience a significant boost in the stock price in the coming weeks amid increased iPhone sales. Nonetheless, Black Friday’s slight pullback could put that theory on hold with investors cautious of the new Covid variant.

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From a valuation perspective, Apple shares trade at reasonable trailing 12-month and forward P/E ratios of 27.93 and 27.25, respectively. Therefore, the stock could be an interesting option for value investors. 

On the other hand, analysts expect its earnings per share to spike by more than 70% this year, before rising at an average annual rate of about 15.43% over the next five years. As a result, AAPL could also gain the attention of growth investors.

Source – TradingView

Technically, Apple shares seem to have recently pulled back to complete a downward breakout from an ascending channel formation. As a result, the stock has dropped to recover from overbought conditions, creating an opportunity for a rebound.

Nonetheless, investors could target extended declines at about $152.78, or lower at $148.49, while $161.68 and $165.60 are crucial resistance zones.

In summary, although Apple shares seem poised for an extended pullback, the holiday season catalyst could drive a long-term rally.

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