After a significant rise of over 32% in the past six months, Apple Inc. is currently trading at approximately 31 times its forward earnings. This valuation is considerably higher than its historical average, prompting caution from analysts. Raymond James has recently reinitiated coverage with a Hold rating as its top analyst, Srini Pajjuri, acknowledges the strengths in Apple's operations.
Pajjuri highlighted the robust performance of the iPhone 17 cycle and the continuous growth of Apple's Services sector, alongside the company's strong ecosystem. However, he pointed out potential risks affecting the company's outlook, including increased component costs, reliance on China, and tariffs.
Despite the positive aspects of Apple's business model, these valuation concerns suggest that the stock may already be priced at high expectations. Pajjuri's assessment indicates a cautious approach rather than a negative outlook for the tech giant.