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Five Investments to Buy Signaled by National Guard Response to Recent Emergencies 

Five investments to buy should benefit from the National Guard response to civil and COVID-19 emergencies in the United States that highlight companies expected to receive increased demand for their goods and services. The five investments to buy in the..

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Five investments to buy should benefit from the National Guard response to civil and COVID-19 emergencies in the United States that highlight companies expected to receive increased demand for their goods and services.

The five investments to buy in the wake of National Guard activations in 46 states and territories provide products and services such as generators that can operate when other power is out, sell advanced communication and broadband devices, provide online sales worldwide and offer supplies for home renovation and repairs. The emergencies have led to the activation of almost 13,000 citizen-soldiers for COVID-19 response nationwide that is approved through April 1, 2022.

Kentucky took the brunt of damage on Dec. 10 that caused 76 confirmed deaths there when multiple tornadoes struck. Gov. Andy Beshear said on Dec. 21 that no additional Kentuckians currently were considered missing from the storms, adding that search and rescue efforts had ended. 

Post-tornado search and rescue missions occur on Dec. 12 in Mayfield, Kentucky. Photo courtesy of Spc. Brett Hornback of the Kentucky National Guard.

Kentucky Tornadoes and National Guard Response Highlight Five Investments to Buy

The most severe tornado that blitzed Kentucky received a rating of EF-4 from the National Weather Service. That tornado pummeled western Kentucky with winds that hit 190 mph while traveling 165 miles on the ground and causing widespread damage.

Almost 500 members of the Kentucky National Guard are on duty to augment law enforcement and assist with traffic control. A total of 15 tornadoes touched down in Middle Tennessee on Dec. 11 and 12, killing five people and injuring 10 others in the state.

Six workers died when an Amazon.com Inc. (NASDAQ: AMZN) warehouse was struck and severely damage by a tornado in Edwardsville, Illinois. The company received a Dec. 20 letter sent to its CEO Andy Jassy and its founder Jeff Bezos by Democratic lawmakers who claimed the Dec. 10 disaster at the warehouse fits a pattern of Amazon putting “worker safety at risk” in everyday situations and emergencies.

Five Investments to Buy Gain Spotlight Amid Civil and COVID-19 Crises 

The response of National Guard troops and airmen to the emergencies indicate investments to buy when wicked winds, pelting rain and building collapses decimate communities. Governors refrain from activating the National Guard unless a genuine emergency occurs, so such actions give investors an early sign of what to buy and sell.

“These incidents, plus global growth, mean the strong demand for commodities will be sustained,” said Bob Carlson, who heads the Retirement Watch investment newsletter. “Most people are underinvested in commodities. Yet, lumber and other commodities are approaching recent highs and are likely to continue rising.”

Pension fund and Retirement Watch chief Bob Carlson answers questions from columnist Paul Dykewicz.

One way to invest in commodities with a single purchase is to buy shares in an exchange-traded fund (ETF) that offers a diversified basket of such equities, counseled Carlson, who also serves as chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets.

While there are many comparable ETFs and exchange-traded note (ETNs), Carlson recommends the iPath Bloomberg Commodity Total Return (DJP). That ETN is designed to track the performance of the Dow Jones-UBS Commodity Index Total Return.

DJP is about 50% allocated to energy commodities, which is typical of most commodity-focused funds, Carlson continued. The rest of the fund’s holdings are allocated to industrial and agricultural commodities.

Chart courtesy of www.stockcharts.com

Generac Holdings Is One of Five Investments to Buy Amid Civil and COVID-19 Crises

Generac Holdings Inc. (NYSE: GNRC) is a Waukesha, Wisconsin-based provider of power generators, energy storage systems, grid services and other power-producing products that serve the residential, light commercial and industrial markets. The company is a new recommendation of Bank of America Global Securities. 

At times when local power sources are down, portable generators provided by Generac literally can save lives. The company holds an estimated 80% market share for North American residential standby generators.

Generac also recently has invested in a backup solar energy storage business that is growing rapidly, while also maintaining a large commercial and industrial business that accounts for about 40% of sales, BoA Global Research wrote in a recent research note. The company stands out for its clean energy strategy and benefits from extreme weather, growth in renewable energy and rising customer demand to protect their lifestyle like a sanctuary amid pandemics, hurricanes and wildfires.

BofA Gives Generac a Price Target of $475 as One of Five Investments to Buy

BofA’s $475 price objective on Generac is based on a 26.5x 2022 estimated enterprise value (EV) / earnings before interest, taxes, depreciation and amortization (EBITDA). The investment firm’s target multiple is at a premium to faster, secular growth industrial peers that trade around 15-20x EBITDA, reflecting Generac’s dominant market position in home residential backup power.

However, Generac trades at a discount to clean tech alternatives that have similar growth trajectories and profitability characteristics. Such clean tech companies are valued at multiples above 30x consensus EBITDA.

Chart courtesy of www.stockcharts.com

Risks to Generac attaining BofA’s price target include supply chain inefficiencies and rising costs that could slow an expected first-half 2022 recovery in margins, BofA wrote. Additional risks entail a possible reduction in power outages, any disappointing home standby orders during the next six month, increased competition in the energy storage market, any large clean energy acquisition that requires the company to issue new shares, unfavorable regulatory changes and any mistakes in trying to penetrate new markets.

Outperformance of the price target may come from another round of severe power outages, growing demand in California and Texas, faster-than-expected demand and margin upside in the clean energy business, stronger-than-expected demand recovery in key commercial and industrial (C&I) markets such as telecommunications and surprisingly strong growth of previously acquired Enbala Power Networks.

Apple Joins Five Investments to Buy in the Wake of National Guard Emergency Responses

For most of 2022, Cupertino, California-based Apple Inc. (NASDAQ: AAPL) has underperformed the S&P 500 index up until the last month when it started to outperform the index. BofA recently wrote that the provider of iPhones, iPads and many other communication and broadband devices offers the safety of a large capitalization stock with good cash flow and a positive outlook for its planned augmented reality (AR) and virtual reality (VR) product.

The civil and COVID-19 emergencies should only enhance the already strong appeal of existing and planned Apple products. Plus, BofA wrote that some portfolio managers that had underweighted Apple may want to own the shares before end-of-the-year holdings are finalized.

BofA forecasts that Apple will introduce an augmented reality/virtual reality headset either by the end of 2022 or early 2023. The investment firm predicts the technology will become an industry “game-changer,” enabling many new applications. 

The product will require high-performance hardware and higher access speeds. The enhanced outlook for Apple caused BofA to upgrade its rating on the stock to “Buy” from “Neutral” and boost its price target on the company to $210 from $160.

Chart courtesy of www.stockcharts.com

Expect a stronger iPhone upgrade cycle in fiscal year 2023, driven by the need for higher connectivity where augmented reality becomes the “killer application” for 5G, BofA predicted. 

Amazon Gains a Place in the Five Stocks to Buy Amid Emergencies

Despite Seattle-based online retailer Amazon.com Inc. (NASDAQ: AMZN) recently receiving a critical letter from Democrats in Congress who claimed the company sacrificed worker safety in pursuit of profits when tornadoes torn apart the company’s warehouse in Edwardsville, Illinois, the company’s prospects still shine. In fact, Amazon is ranked by BofA as the top FANG stock for 2022. One reason is that Amazon unperformed in 2021 and could and could be poised for a bounce back.

BofA not only advanced its rating on Amazon to a “Buy,” but the investment firm boosted its price target to $4,450 from $4,250. As the calendar moves to the summer and fall of 2022, expect eCommerce strength as online penetration gains renewed momentum, BofA wrote.

The prospects for Amazon should improve during 2022 to end much better than it starts, BofA wrote. The investment firm predicts Amazon will gain a lift from supply chain improvements and infrastructure investments.

Chart courtesy of www.stockcharts.com

Lowe’s Lands on List of Five Investments to Buy During Emergencies

Mooresville, North Carolina-based home-improvement giant Lowe’s Companies Inc. (NYSE: LOW) should only gain additional business from the civil and COVID-19 crises, based on its past performance with the pandemic and hurricanes. Destroyed or damaged houses and buildings always need to be replaced or fixed, respectively.

Lowe’s sells the home-improvement supplies and tools that are needed to recover from such as calamity. Even before the disaster, the potential of Lowe’s had been brightening, according to BofA.

The investment firm’s September 2021 survey about working from home reported that respondents intend to spend more on home improvement in the next 12 months than they did in the last 12 months. Therefore, even on top of 2020’s unprecedented growth, home improvement spending in 2021 is reaching even higher levels.

Following Lowe’s strong third-quarter results, BofA raised its estimates and price objectives on the stock, as well as affirmed its “Buy” rating on the company.

BofA placed a $292 price target on Lowe’s, giving it a 22x 2022 earnings per share estimate. A valuation multiple above the five-year average of 15x is warranted for Lowe’s due to its solid fundamentals and the relatively defensive nature of the home-improvement industry, BofA opined. 

“In addition, LOW has an opportunity to expand margins for several years through continued productivity improvements and product differentiation,” BofA wrote.

Chart courtesy of www.stockcharts.com

COVID-19 Crisis Spares Five Investments to Buy from Big Fallout

The holiday season of 2021 marks the second straight year COVID-19 has disrupted the plans of families and their friends to gather. Scientists have found that the new Omicron variant of COVID-19 is spreading faster than other coronavirus strains but its severity compared to the highly infectious Delta variant is unclear.

Omicron has become the dominant variant of COVID-19 in the United States, accounting for nearly three-quarters of new infections last week.

Almost 42,600 people tested positive in New York City from Dec. 15 through Dec. 18, compared with fewer than 35,800 in the full month of November. It is the highest number of people to test positive in such a short period of time in New York City since testing became widely available. 

In Britain, coronavirus infections have soared 60% in the past week. That led to Omicron bumping off the Delta strain as the dominant variant there.

COVID-19 Risk Remains a Worry as Cases and Deaths Climb

The new Omicron variant of COVID-19 and the highly transmissible Delta variant are causing continuing concerns in the United States and other parts of the world. Public health experts and government leaders keep advocating for increased vaccinations and booster shots, as well as indoor mask wearing.

Airman 1st Class Tenzin Dakar, an aerospace medical technician with the 104th Medical Group, and Spc. Michael Major, a unit supply specialist with the 125th Quartermaster Company, help with COVID-19 testing in Massachusetts on Nov. 17.

The Centers for Disease Control and Prevention (CDC) has data that show the variants are boosting the number of people receiving COVID-19 vaccinations. But close to 62 million people in the United States remain eligible to be vaccinated but have not seized the opportunity, said Dr. Anthony Fauci, the chief White House medical adviser on COVID-19.

As of Dec. 22, 241,132,288 people, or 7.6% of the U.S. population, have received at least one dose of a COVID-19 vaccine, the CDC reported. The fully vaccinated total 204,578,725 people, or 61.6%, of the U.S. population, according to the CDC.

COVID-19 deaths worldwide, as of Dec. 22, exceeded the 5.3 million mark to reach 5,369,231, according to Johns Hopkins University. Worldwide COVID-19 cases have topped 276 million, climbing to 276,246,019 on that date.

U.S. COVID-19 cases, as of Dec. 22, hit 51,272,861 and caused 810,045 deaths. America has the dubious distinction as the nation with the most COVID-19 cases and deaths.

The five investments to buy amid the current civil and COVID-19 emergencies should be among the 2022 success stories. The National Guard activations often are the first indicator that a crisis is brewing and investors would be wise to pay attention to find opportunities to pursue without missing the market’s next upturn.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

 

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Government

Buyouts can bring relief from medical debt, but they’re far from a cure

Local governments are increasingly buying – and forgiving – their residents’ medical debt.

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March 13, 2024

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Medical debt can have devastating consequences. PhotoAlto/Odilon Dimier via Getty Images

One in 10 Americans carry medical debt, while 2 in 5 are underinsured and at risk of not being able to pay their medical bills.

This burden crushes millions of families under mounting bills and contributes to the widening gap between rich and poor.

Some relief has come with a wave of debt buyouts by county and city governments, charities and even fast-food restaurants that pay pennies on the dollar to clear enormous balances. But as a health policy and economics researcher who studies out-of-pocket medical expenses, I think these buyouts are only a partial solution.

A quick fix that works

Over the past 10 years, the nonprofit RIP Medical Debt has emerged as the leader in making buyouts happen, using crowdfunding campaigns, celebrity engagement, and partnerships in the private and public sectors. It connects charitable buyers with hospitals and debt collection companies to arrange the sale and erasure of large bundles of debt.

The buyouts focus on low-income households and those with extreme debt burdens. You can’t sign up to have debt wiped away; you just get notified if you’re one of the lucky ones included in a bundle that’s bought off. In 2020, the U.S. Department of Health and Human Services reviewed this strategy and determined it didn’t violate anti-kickback statutes, which reassured hospitals and collectors that they wouldn’t get in legal trouble partnering with RIP Medical Debt.

Buying a bundle of debt saddling low-income families can be a bargain. Hospitals and collection agencies are typically willing to sell the debt for steep discounts, even pennies on the dollar. That’s a great return on investment for philanthropists looking to make a big social impact.

And it’s not just charities pitching in. Local governments across the country, from Cook County, Illinois, to New Orleans, have been directing sizable public funds toward this cause. New York City recently announced plans to buy off the medical debt for half a million residents, at a cost of US$18 million. That would be the largest public buyout on record, although Los Angeles County may trump New York if it carries out its proposal to spend $24 million to help 810,000 residents erase their debt.

HBO’s John Oliver has collaborated with RIP Medical Debt.

Nationally, RIP Medical Debt has helped clear more than $10 billion in debt over the past decade. That’s a huge number, but a small fraction of the estimated $220 billion in medical debt out there. Ultimately, prevention would be better than cure.

Preventing medical debt is trickier

Medical debt has been a persistent problem over the past decade even after the reforms of the 2010 Affordable Care Act increased insurance coverage and made a dent in debt, especially in states that expanded Medicaid. A recent national survey by the Commonwealth Fund found that 43% of Americans lacked adequate insurance in 2022, which puts them at risk of taking on medical debt.

Unfortunately, it’s incredibly difficult to close coverage gaps in the patchwork American insurance system, which ties eligibility to employment, income, age, family size and location – all things that can change over time. But even in the absence of a total overhaul, there are several policy proposals that could keep the medical debt problem from getting worse.

Medicaid expansion has been shown to reduce uninsurance, underinsurance and medical debt. Unfortunately, insurance gaps are likely to get worse in the coming year, as states unwind their pandemic-era Medicaid rules, leaving millions without coverage. Bolstering Medicaid access in the 10 states that haven’t yet expanded the program could go a long way.

Once patients have a medical bill in hand that they can’t afford, it can be tricky to navigate financial aid and payment options. Some states, like Maryland and California, are ahead of the curve with policies that make it easier for patients to access aid and that rein in the use of liens, lawsuits and other aggressive collections tactics. More states could follow suit.

Another major factor driving underinsurance is rising out-of-pocket costs – like high deductibles – for those with private insurance. This is especially a concern for low-wage workers who live paycheck to paycheck. More than half of large employers believe their employees have concerns about their ability to afford medical care.

Lowering deductibles and out-of-pocket maximums could protect patients from accumulating debt, since it would lower the total amount they could incur in a given time period. But if the current system otherwise stayed the same, then premiums would have to rise to offset the reduction in out-of-pocket payments. Higher premiums would transfer costs across everyone in the insurance pool and make enrolling in insurance unreachable for some – which doesn’t solve the underinsurance problem.

Reducing out-of-pocket liability without inflating premiums would only be possible if the overall cost of health care drops. Fortunately, there’s room to reduce waste. Americans spend more on health care than people in other wealthy countries do, and arguably get less for their money. More than a quarter of health spending is on administrative costs, and the high prices Americans pay don’t necessarily translate into high-value care. That’s why some states like Massachusetts and California are experimenting with cost growth limits.

Momentum toward policy change

The growing number of city and county governments buying off medical debt signals that local leaders view medical debt as a problem worth solving. Congress has passed substantial price transparency laws and prohibited surprise medical billing in recent years. The Consumer Financial Protection Bureau is exploring rule changes for medical debt collections and reporting, and national credit bureaus have voluntarily removed some medical debt from credit reports to limit its impact on people’s approval for loans, leases and jobs.

These recent actions show that leaders at all levels of government want to end medical debt. I think that’s a good sign. After all, recognizing a problem is the first step toward meaningful change.

Erin Duffy receives funding from Arnold Ventures.

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Student Loan Forgiveness Is Robbing Peter To Pay Paul

Student Loan Forgiveness Is Robbing Peter To Pay Paul

Via SchiffGold.com,

With President Biden’s Saving on a Valuable Education (SAVE)…

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March 13, 2024

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Student Loan Forgiveness Is Robbing Peter To Pay Paul

Via SchiffGold.com,

With President Biden’s Saving on a Valuable Education (SAVE) plan set to extend more student loan relief to borrowers this summer, the federal government is pretending it can wave a magic wand to make debts disappear. But the truth of student debt “relief” is that they’re simply shifting the burden to everyone else, robbing Peter to pay Paul and funneling more steam into an inflation pressure cooker that’s already set to burst.

Starting July 1st, new rules go into effect that change the discretionary income requirements for their payment plans from 10% to only 5% for undergraduates, leading to lower payments for millions. Some borrowers will even have their owed balances revert to zero.

What the plan doesn’t describe, predictably, is how that burden will be shifted to the rest of the country by stealing value out of their pockets via new taxes or increased inflation, which still simmering well above levels seen in early 2020 before the Fed printed trillions in Covid “stimulus” money. They’re rewarding students who took out loans they can’t afford and punishing those who paid their way or repaid their loans, attending school while living within their means. And they’re stealing from the entire country to finance it.

Biden actually claims that a continuing Covid “emergency” is what gives him the authority to offer student loan forgiveness to begin with. As with any “temporary” measure that gives state power a pretense to grow, or gives them an excuse to collect more revenue (I’m looking at you, federal income tax), COVID-19 continues to be the gift that keeps on giving for power and revenue-hungry politicians even as the CDC reclassifies the virus as a threat similar to the seasonal flu.

The SAVE plan takes the burden of billions of dollars in owed payments away from students and adds it to a national debt that’s already ballooning to the tune of a mind-boggling trillion dollars every 3 months. If all student loan debt were forgiven, according to the Brookings Institution, it would surpass the cumulative totals for the past 20 years for multiple existing tax credits and welfare programs:

“Forgiving all student debt would be a transfer larger than the amounts the nation has spent over the past 20 years on unemployment insurance, larger than the amount it has spent on the Earned Income Tax Credit, and larger than the amount it has spent on food stamps.”

Ironically enough, adding hundreds of billions to the national debt from Biden’s program is likely to cause the most pain to the very demographics the Biden administration claims to be helping with its plan: poor people, anyone who skipped college entirely or paid their loans back, and other already overly-indebted young adults, whose purchasing power is being rapidly eroded by out-of-control government spending and central bank monetary shenanigans. It effectively transfers even more wealth from the poor to the wealthy, a trend that Covid-era measures have taken to new extremes.

As Ron Paul pointed out in a recent op-ed for the Eurasia Review:

“…these loans will be paid off in part by taxpayers who did not go to college, paid their own way through school, or have already paid off their student loans. Since those with college degrees tend to earn more over time than those without them, this program redistributes wealth from lower to higher income Americans.”

Even some progressives are taking aim at the plan, not because it shifts the debt burden to other Americans, but because it will require cutting welfare or sacrificing other expensive social programs promised by Biden such as universal pre-K. For these critics, the issue isn’t so much that spending and debt are totally out of control, but that they’re being funneled into the wrong issues.

Progressive “solutions” always seem to take the form of slogans like “tax the wealthy,” a feel-good bromide that for lawmakers always seems to translate into increased taxes for the middle and lower-upper class. Meanwhile, the .01% continue to avoid taxes through offshore accounts, money laundering trickery dressed up as philanthropy, and general de facto ownership of the system through channels like political donations and aggressive lobbying.

If new waves of college applicants expect loan forgiveness plans to continue, it also encourages schools to continue raising tuition and motivates prospective students to continue with even more irresponsible borrowing.

This puts pressure on the Fed to keep interest rates lower to help accommodate waves of new student loan applicants from sparkly-eyed young borrowers who figure they’ll never really have to pay the money back.

With the Fed already expected to cut rates this year despite inflation not being properly under control, the loan forgiveness scheme is just one of many factors conspiring to cause inflation to start running hotter again, spiraling out of control, as the entire country is forced to pay the hidden tax of price increases for all their basic needs.

Tyler Durden Wed, 03/13/2024 - 06:30

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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13 hours ago

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March 12, 2024

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com. 

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

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Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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