Apple pops pre-market after Merrill Lynch issues Buy

CNBC has the goods.

From “Bank of America upgrades Apple to buy, says ‘pullback presents opportunity’”:

Bank of America upgraded Apple shares to buy from neutral on Monday, saying the recent pullback in the stock “presents opportunity.”

“AAPL stock is down 26% from its peak (S&P down 9%) and up 9% YTD (inline with S&P 500 and below the S15INFT of 13%). Our scenario analysis suggests that shares are discounting a “declining hardware” scenario (ex-cash, services), and the debate hinges on the L/T trajectory. In our opinion, weakness in hardware is not entirely structural. Our new PO of $210 is based on assumptions closer to scenario 2 (flat hardware, and somewhat slower than historical growth in Services).”

Mohan, who made a prescient downgrade of the stock at the start of November, listed in the note eight other reasons why Apple is a buy here including “stability of supply chain order cuts” and “growth across healthcare, wearables and increasing services penetration.”

Upgrades to Buy from Neutral, raises price target to $210 from $180.

My take: This could signal the start of a new round of upgrades. Waiting to get my hands on the note.