BMO Capital Optimistic About Apple (AAPL)

BMO Capital reaffirmed its “Market Perform” rating on the California-based tech bellwether, Apple Inc. (AAPL), while most other financial media outlets focused on the stock’s negative performance YTD along with concerns over upcoming earnings.

Keith Bachman, an analyst with the firm, raised FY14 EPS estimates from $40.62 to $42.08 along with an improved price target of $450 from $435 previously. Bachman went on to comment, ”We believe that the long-term trends of greater competition will pressure Apple’s growth and/or margins in handsets. However, near term, we think gross margins will increase q/q, helped by the fact that Apple took a material warranty charge in the March quarter, which negatively impacted margins by almost 100 basis points. We would expect the stock to positively respond to favorable margin variance near term.”

Apple shares traded lower by 2.65% on Monday alongside the broad-market. The stock is down nearly 25% YTD.

The Bottom Line

Shares of Apple Inc. (AAPL) have a 3.03% yield, based on Monday’s closing price of $402.54.

Apple Inc. (AAPL)  is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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