Tech Researcher Says That Apple Inc (AAPL) Is Well-Positioned, Stock Is a Buy

The Trump administration’s tariffs will prove to be “pretty transitory,” while Apple’s (AAPL) new iPhones will have higher average sales prices than their predecessors, Ben Reitzes, a Managing Director and Head of Technology Research at Melius Research told CNBC recently.

As a result of these points, Reitzes has a Buy rating on AAPL stock.

A wide view of an Apple store, showing the range of products the company offers.

How Tariffs Will Affect Apple Inc. (AAPL), According to Reitzes 

Reitzes says that he’s “pretty optimistic” that there will “eventually (be) a deal” between the U.S. and China regarding tariffs.

Nonetheless, Apple’s profit margins are likely to undergo downward pressure over the longer term as the company shifts some of its supply chain to the U.S., he predicted.

But the researcher suggested that Apple would not be significantly damaged by tariffs over the longer term.

Analyzing Apple Inc (AAPL)’s Services Business

After a federal court ruled that Apple Inc (AAPL) had violated an injunction restricting the fees that it charges on app sales made outside of its ecosystem, the tech giant began allowing the owners of App Store apps to direct users to their websites. In the wake of Apple’s move, the tech giant declined to provide guidance for its Services business for the current quarter, Reitzes noted.

But, according to the researcher, AAPL can potentially take various, positive steps, including launching new services and making new deals with Alphabet (GOOG) and/or Open AI. Such initiatives will make investors “less worried” about the tech giant’s Services business, he said.

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Disclosure: None. This article is originally published at Insider Monkey