Apple's stock reverses higher, as Needham cuts rating but remains bullish and boosts price target

Shares of Apple Inc. rallied 0.6% in afternoon trading Monday, reversing an earlier loss of as much as 1.6%, as Needham analyst Laura Martin downgraded the technology giant but remained bullish, while raising her price target by 25%. The stock is now just fractionally below its Jan. 2 record close of $300.35. Martin cut her rating to buy from strong buy, after the stock's "significant outperformance" in 2019 that raised the price above her target. For Needham analysts, a strong buy rating reflects expectations the stock will outperform both the average total return of the broader stock market, as well as the other stocks an analyst covers, while a buy rating reflects expectations that a stock will outperform just the broader stock market. Martin raised her price target to $350, which is 17% above current levels, from $280. She said the stock is still on her "conviction list," given her belief that the company has direct relationships with 900 million of the wealthiest consumers in the world, is transitioning to a recurring revenue business model, is a "pure play" on the trend toward "always-on" mobility and is a "gatekeeper" for apps so it can require revenue shares from all apps. Apple had declined earlier, with Deutsche Bank cautioning investors not to expect another 2019-like rally; analyst Jeriel Ong raised the price target to $280 from $235 but reiterated the hold rating. Apple's stock has gained 1.9% so far this year, after soaring 86% in 2019, while the Dow Jones Industrial Average has edged up 0.3% this year after climbing 22% last year.

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