Goldman Sachs recommends buying Apple shares for first time in six years

The Apple iPhone 14 during an event at Apple Park campus in Cupertino, California, US, on Wednesday, Sept. 7, 2022. Apple Inc. unveiled a new lineup of devices Wednesday with few surprises beyond one major one: It didn’t raise its US prices during one of the worst years for inflation in decades. Photographer: Nic Coury/Bloomberg

Goldman Sachs Group Inc. is recommending buying Apple Inc. shares for the first time in nearly six years, after being mostly on the sidelines as the iPhone maker’s stock more than quadrupled in value.

Analyst Michael Ng just took over coverage of the company, whose large user base he says will help the iPhone maker grow its services business.

“Apple’s success in premier hardware design and resulting brand loyalty has led to a growing installed base of users,” said Ng, who is the third Goldman analyst to cover the stock in six years, according to data compiled by Bloomberg. This helps the company reduce the number of users leaving the ecosystem, lowers client acquisition costs and encourages customers to repeat purchases, he wrote in a note.

The Cupertino, California-based company’s stock was rated neutral or sell under Ng’s predecessor Rod Hall, who covered the company for nearly five years. Apple has rallied more than 300% since Goldman last had a buy-equivalent recommendation in 2017. The bank didn’t immediately respond to a request for comment on the rating history.

Goldman’s new price target of $199 implies 32% upside from the stock’s last price and is clearly above the average of $168.82.