Apple Remains Very Attractive Despite Weak November, Brian White Says

Brian White of Drexel Hamilton remains one of the Street's most bullish Apple analysts given his Buy rating and $200 price target. The analyst on Tuesday reiterated his stance on the company, noting that Apple remains "one of the most undervalued technology stocks in the world."

According to White, Apple's stock is trading at just over 9x his calendar year 2016 earnings per share estimate (excluding cash). He noted his price target is based on his 17x multiple on calendar year 2016 pro forma EPS estimate (adjusted for net interest income), plus the company's net cash per share of $25.71.

Apple's Suppliers Reporting Weak November

White acknowledged that 97 percent of the companies within his "Apple Monitor" (i.e, a basket of Apple suppliers in Taiwan) portfolio have reported their November sales. As a whole, the group's sales were seasonally weak – although this did follow a stronger than average October.

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White continued that preliminary revenue for his Apple Monitor portfolio fell by 6 percent month-over-month, underperforming last year's 4 percent month-over-month gain. On the other hand, October's sales rose 9 percent month-over-month, outperforming the 6 percent average seen over the past nine years.

White is now estimating fourth-quarter sales for the Apple Monitor group will grow by 16 percent, based on average month-over-month seasonal sales trends. While this growth rate does fall below the average quarterly increase of 20 percent over the past year, the analyst is "not concerned," as Apple's own December guidance has already called for a weaker than average seasonality.

Finally, White suggested that Apple is "well positioned" to benefit from the Chinese New Year that begins on February 8 of next year. In addition, the Apple Watch will prove to be a "big hit" this holiday season, thereby "creating another ‘branch' on the Apple tree."

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