Is every drop of Apple below a 25 times PE a buying opportunity?
Bank of America Merrill Lynch pointed out that Apple's stock price has recently fallen by 25.5%, mainly affected by geopolitical uncertainty and tariff issues. Historical data shows that when Apple's price-to-earnings ratio is below 25 times, the stock price performance in the next 3-12 months is usually better, with an average increase of 7%-17%. Although it may decline by 5%-11% in the next 3 months, in the long term, the increase could reach 11%-26%
Bank of America Merrill Lynch:
Apple Inc.'s stock price has recently experienced a significant decline, down 25.5% year-to-date and down 23.5% since the last earnings report. In contrast, the S&P 500 index has fallen 13.7% and 16.6% during the same periods. The report indicates that geopolitical uncertainty and tariff issues are the main reasons for the decline in Apple's stock price.
However, historical data shows that when Apple's price-to-earnings ratio is below 25 times, its stock performance in the next 3-12 months is usually better. Specifically, the average price increases for Apple stock in the 3 months, 6 months, 9 months, and 12 months after the price-to-earnings ratio falls below 25 times are 7%, 8%, 14%, and 17%, respectively. Although the stock price may decline by 5% to 11% in the next 3 months, the potential increase could reach 11%-26%.
