|Bid||33.36 x 2200|
|Ask||33.37 x 1800|
|Day's Range||33.20 - 33.44|
|52 Week Range||26.21 - 35.72|
|Beta (5Y Monthly)||1.65|
|PE Ratio (TTM)||12.14|
|Forward Dividend & Yield||0.72 (2.19%)|
|Ex-Dividend Date||Dec 04, 2019|
|1y Target Est||N/A|
Although the recommendation to buy when there's blood in the streets has been attributed to more than one rich businessman, it is a solid approach to creating substantial wealth. In this article, we've outlined five investors who demonstrated remarkable timing by making big investments during the credit crisis and are well on their way to huge gains as a result. You can't really understand the philosophies and actions of successful investors without first getting a handle on the financial crisis.
For the past seven months Christopher Yanney has run in the rain and snow, trained with the thermostat set to 85 degrees, and hit the pavement as early as 1 am in preparation for the 183.4 miles he will face over the course of seven days in February. The co-founder of investment firm CKC Capital is set to participate in the World Marathon Challenge, a grueling test of strength where competitors complete seven marathons on seven continents in seven days. Participants are set to kick-off the first race in Antarctica on February 6.
The banking giant’s ATMs will soon be in South Station, Downtown Crossing and more, the latest strike in Chase's aggressive bid for Boston deposit dollars.
U.S. stocks fell more than 1% on Monday as investors worried about the economic fallout of the fast-spreading coronavirus outbreak in China that has prompted the country to extend the Lunar New Year holidays and businesses to close some operations. The benchmark S&P 500 was jolted off record highs last week as China locked down several cities and curbed travel, reminding investors of the deadly SARS virus that killed nearly 800 people in 2002-03 and cost the global economy billions. Travel-related stocks, including airlines, casinos and hotels, were the worst-hit on Wall Street, while shares of tech heavyweights that enjoyed a strong rally recently dragged markets lower.
U.S. stock indexes were set to open more than 1% lower on Monday on concerns about the financial fallout of a fast-spreading coronavirus outbreak in China as the country extended the Lunar New Year holidays and businesses shut down some operations. Travel-related stocks, including airlines, casinos and hotels, were the worst-hit in premarket trading, with several cities in China in lockdown for contagion fears and new cases being reported from across the world. Wynn Resorts Ltd, Melco Resorts & Entertainment Ltd and Las Vegas Sands Corp, which have large operations in China, were down between 6% and 8%.
Financial stocks sank Monday, as worries over the impact of the fast-spreading coronavirus out of China on economic growth sent Treasury yields to multi-month lows. The SPDR Financial Select Sector ETF slumped 1.8% toward a 7-week low. Among the more active components in premarket trading, shares of Bank of America Corp. slid 2.7%, Citigroup Inc. shed 2.5%, J.P. Morgan Chase & Co. dropped 2.2%, Wells Fargo & Co. gave up 1.9% and Berkshire Hathaway Inc. declined 1.6%. Meanwhile, futures for the Dow Jones Industrial Average were down 430 points, or 1.5%. The yield on the 10-year Treasury note fell 6.3 basis points to a 3 1/2-month low of 1.618%. Lower long-term interest rates could hurt bank profits, as the spread between what they could earn on longer-term liabilities, such as loans, which are funded by shorter-term assets.
Like the majority of investors, you're most likely working on a retirement portfolio that will provide a large enough nest egg to give you a comfortable retirement. Make sure you know all about what financial planners call the accumulation and distribution phases of retirement planning.
the FT his bank’s retail operation could in time double its market share. Given BofA is already the largest retail bank in the country, that would make it very large indeed, with about a quarter of the US market and something in the order of $1.5tn in retail deposits. Mr Moynihan pointed out that other consumer industries, such as beer and cars, have much higher levels of concentration, with single companies holding up to half the market.
In a new interview, Bank of America CEO Brian Moynihan said oil and gas companies need funding so they can be part of the solution to climate change.
U.S. companies' borrowings for capital investments rose about 2% in December from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Friday. The companies signed up for $12.9 billion in new loans, leases and lines of credit last month, up from $12.7 billion a year earlier. Some ELFA member organizations are seeing slightly elevated levels of stress in their business amid slowing global economic growth, ELFA's Chief Executive Officer Ralph Petta said.
I started my professional career in banking. First I was with Merrill Lynch International Bank, then with the boutique Mark Twain Bank -- now part of U.S. Bancorp (NYSE:USB) -- and onto Investec.The key to banking is to gather deposits, seek out opportunities to make loans, cut costs and maximize fee income -- and make absolutely sure that you know how the bank will get paid interest and principal.There are specific metrics to measure how a bank is faring. Banks report deposit and loan growth, of course. And they report profit margins. These include the net interest margin (NIM) which is the difference between what a bank pays for deposits and what it earns in loans. And for cost controls there's the efficiency ratio which measures the percentage of what it costs a bank to earn each dollar in revenue. The lower the ratio, the lower the costs and the higher the profit margins.InvestorPlace - Stock Market News, Stock Advice & Trading TipsU.S. bank stocks have been lagging for some time. First, interest rates have remained quite low as the Federal Reserve and its Open Market Committee (FOMC) has been buying bonds to drive yields lower. With rates so low, NIM was also kept very low, leaving little profitability for banks in their traditional job of attracting deposits and making loans.Then, in response to that same mess, banks were burdened with a myriad of capital requirements, which ultimately drove up costs. These regulations led efficiency ratios way up and in turn drove down profit. The result is that over the past ten years, bank stocks as tracked by the KBW Bank Index have woefully trailed the return of the general S&P 500 by 83.4%.Source: Chart by Bloomberg But in the fourth quarter of 2019 banks stocks got some investor interest as they were pitched as value stocks. And the KBW Bank Index got some life in the process.Source: Chart by Bloomberg However, we've now gotten a collection of quarterly reports from the big banks in the U.S. and it is not good. NIM is down -- made worse with the FOMC's resumption of quantitative easing (QE), bond buying and lower targeted interest rates. And efficiency ratios are getting worse as promised regulatory relief is not panning out.Meanwhile, alternatives to banks have been thriving without the same regulations. The alt-financials are doing much better and their shareholders are being better rewarded.Last year I dumped the banks inside my Profitable Investing because of all the false starts for NIM and efficiencies. And with banks getting positive news of recent, I am arguing again that U.S. bank stocks should not be bought -- and should be sold right now. Bank Stocks to Sell: Wells Fargo (WFC)Source: Chart by Bloomberg Let's start with Wells Fargo (NYSE:WFC). Now, forget about the regulatory purgatory that the bank finds itself in after years of customer abuse and the millions of dollars in fines announced this week. And forget about the restrictions on the bank's size and growth resulting from the history of fraud.Wells Fargo has other core issues.Deposits are barely moving with the trailing year seeing anemic growth of 2.8%. But what really stings is that loan growth is only 1.7% -- in an economy which remains robust. Net interest margin (NIM) is only 2.8%Source: Chart by Bloomberg That NIM is down sharply and reflects the challenges given the changes in short-term U.S. interest rates. But what is more disturbing is the cost of revenue, with the efficiency ratio at a whopping 78.1% -- which to remind you means that it takes 78.1 cents to make $1 in revenue. That's not a way to be profitable for shareholders.The return on assets is on par with other banks at 1%, but the return on equity is weak at 10.6%. The one grace is that non-performing assets (NPAs) are quite low at 0.3% of total assets and 0.6% of total loans.Shareholders have been getting what they deserve if they still own this stock. Over the trailing five years, WFC has lost 9.5% in price and managed to return on 5.7%. This compares to the S&P 500's return of 79.5% and the KBW Bank Index return of 79.7%. Bank of America (BAC)Source: Chart by Bloomberg Next up is Bank of America (NYSE:BAC). This bank is not much better even without the fraud issues of Wells Fargo. NIM continues to fall over the past two quarters, reversing modest gains, and is down to 2.5%. And while the efficiency ratio is much better than in the prior quarter, at 59% it is still very high.Source: Chart by Bloomberg Return on assets is again on par at 1.1%, but not impressive. And the return on equity is low at a mere 10.7%. NPA represent 0.2% of total assets and 0.4% of total loans, so risks are muted. But deposits aren't moving up much at a rate of 3.9%. Loan growth is low at 3.7%.What is interesting is that BAC has been able to both outpace the S&P 500 and the KBW Bank Index in total return over the trailing five years.Despite the improved stock price, this brings trouble for investors. This is because the market has really only bolstered the valuation of the stock, rather than the company bolstering its underlying book and sales numbers.Source: Chart by Bloomberg Regions Financial (RF)Source: Chart by Bloomberg Regions Financial (NYSE:RF) was a favored bank of mine back in 2018. The U.S.-centric bank has regional presences in some of the best parts of the country. And the U.S. economy was set to improve its financial performances. Indeed, if you look at its 2018 quarterly reports, you'll see some signs of improving NIM and efficiency ratios which came from better management.But that's now reversed, with NIM dropping to 3.4% and the efficiency ratio climbing to 60.1%.But what really looks bad for Regions is in the core business of being a bank. Deposits are up at 3.2%, but loans -- the core way that banks make money -- have only managed to edge up by 0.2%. That's terrible. And while NPA are low (no wonder given the low growth rate) the resulting return on assets is only 1.3% with return on equity only managing to reach 10.3%.That said, somehow folks have been willing to pay up for the bank's shares with the past five years seeing a return of 105.3% compared to the S&P 500 and KBW Bank indices generating returns in the 79% range.But don't get carried away. Unlike how enthusiasm in BAC is pushing up price-to-book and price-to-sales ratios, with Regions, the stock price has come more in line with weaker valuation measures. The price-to-book ratio is sitting just above 1 and the price-to-sales ratio sits at 2.4 times.Source: Chart by Bloomberg I see more challenges for growth in Regions and more cost cutting ahead. U.S. Bancorp (USB)Source: Chart by Bloomberg U.S. Bancorp is perhaps one of the better banks in the U.S. market. It wants to stay in business even if that means a more modest growth rate. The case in point is the run-up in U.S. financials leading to the mortgage mess starting in the summer of 2007.U.S. Bancorp was fine. It didn't need any funds or assistance from the Troubled Asset Relief Program under 2008's Emergency Economic Stabilization Act. But it went along with parts of the TARP as to not make its peers look bad.Source: Chart by Bloomberg But this doesn't make things much better for the shareholders. The bank has seen its NIM drop to a current level of 3.2%. And with costs out of control, the efficiency ratio is up sharply to 60%.To be fair, USB has been better at attracting deposits, with growth running at 4.8%. And its bankers have been doing something as loan growth is up by 4.4%. But that loan growth is still way lower than levels throughout 2016.The return on assets is a bit healthier at 1.4% as is the return on equity running at 14.5%. The conservative nature of the bank has NPA to total assets and total loans at barely-there levels of 0.2% and 0.3% respectively. So, the bank isn't going anywhere even if the U.S. economy reverses.But shareholders and the stock market have not been kind to the stock. The return trails the S&P 500 and KBW Bank indices. And this stock performance also shows up in the valuation of the bank with P/B and P/S ratios both drifting lower over the trailing three years.Source: Chart by Bloomberg Now a further word about banks in the U.S. and the elections. With the current administration, banks have gotten a little bit of relief. But if there is a change of guard on Nov. 3, banks will be in further peril with projected ramp-ups in regulatory issues and capital requirements. This is perhaps (outside of petroleum-related companies) the most at-risk sector in the election run-up. Bankers Busted & BestedEvery industry has its disruptors. The old and established leaders get comfortable doing things the same way, because that's what has worked for decades. Sometimes disruptors come with new ideas and approaches. Others come with new technologies.Banking is getting it badly. Technology companies referred to as financial technology (fintech) continue to rapidly rollout non-bank payment, loan and deposit apps. These are increasingly making banking with traditional banks less necessary, if not more costly. And even mortgages can be applied for or refinanced via apps.This has led many newer stocks to grab investor attention including Square (NYSE:SQ) with its alternative mobile payment and point-of-sale services. It may be gathering new adopters with revenue up over the trailing year by 49%, but it has negative operating margins of 1.1%.And dividends? Not with Square's cash burn. No wonder that in the trailing year insiders have been reporting millions upon millions of shares sold -- not bought. Bad indicator.Then there's Fiserv (NASDAQ:FISV) which provides behind-the-scenes services to alt-financial companies. This company is a bit more responsible, with operating margins running at 30.1%. Those margins in turn are helping the return on equity reach a meager 5.3%. But its sales are anemic with gains over the trailing year of only 2.2%.Fintech might be a good disruptor for beating traditional banks -- but not so rewarding for investors. But what are beating and besting traditional banks are what I call alt-financials. These companies are doing what banks used to be good -- making loans and earning lots of interest and fee income.Alt-financials come from three obscure bits of Congressional legislation: The Investment Companies Act of 1940, the Small Business Investment Incentive Act of 1980 and the Cigar Excise Tax Extension Act of 1960. Bank Business DevelopersBack in the late 1970s, inflation was out of control, driving interest rates to the moon. This made banks reticent to lend, since they didn't know what to expect in return. So, the 1980 legislation allowed non-banks to operate as investment companies which could make loans and invest in financing facilities. This began what are largely known as business development companies (BDCs) which also do not have to pay traditional corporate income taxes.BDCs have been a very successful business model over the past many years. They continue to outperform banks in total return, as measured by the MVIS BDC Index compared to the KBW Bank Index.Source: Chart by Bloomberg BDCs are outside much regulatory purview and they don't do deposits. And it shows in the performance of the MVIS BDC Index, generating a trailing year return of 20.8% including an average trailing tax-advantaged dividend yield of 9.3%. This compares to the KBW Bank Index return of 16.8% and its lower average yield of 2.7%.Moreover, BDCs also participate in the business loan market. Although this market can be shady, well-run BDCs can participate in senior loans, adding them to their portfolio assets. And senior loans continue to perform well, even as non-bank companies continue to grab more of the business loan market.Source: Chart by Bloomberg Bank Stocks to Buy: Hercules Capital (HTGC)Source: Chart by Bloomberg In the model portfolios of my Profitable Investing, I have a great BDC in Hercules Capital (NYSE:HTGC). Hercules is based in Palo Alto, California, with offices around the nation. It focuses on working with technology companies and has a good track record of financing startups to become bold-faced names in the tech market. HTGC makes loans and provides other financing and also takes equity participation in its portfolio companies. It then works with them like bankers used to do, by guiding them along to an exit strategy.NIM is ample at 9.4% and the efficiency ratio is good at 52.5% (the lower the ratio, the greater the profitability, as noted earlier). Revenues are up 8.8% for the trailing year and it feeds a nice annual dividend stream including regular special distributions yielding 9.2%.And note, I have Hercules Capital as my one stock for 2020 in InvestorPlace.com's Best Stocks for 2020 contest. Main Street Capital (MAIN)Source: Chart by Bloomberg Then I also have Main Street Capital (NYSE:MAIN) inside Profitable Investing. This BDC focuses on more mundane small to middle-market companies. It has wide financial margin and an efficiency ratio of an amazing 8.2%. Plus it pays an annual dividend -- including regular special distributions -- yielding 6.6%. TPG Specialty Lending (TSLX)Source: Chart by Bloomberg Then there is my recommended TPG Specialty Lending (NYSE:TSLX). This alt-financial provides financing and capital to a variety of companies, including loan assets in its portfolio. TSLX is part of the famous TPG Capital, formally the Texas Pacific Group. TPG is one of the largest and most successful private equity firms in the world. It's safe to say that TPG Specialty draws great talent and resources from its affiliate.Revenues are up on a tear with the trailing year climbing by 24.2%. Its NIM is running at 10.2% and it keeps its efficiency ratio humming at a profitable 31.5%.The company has generated a return of 101.1% over the trailing five years for an average annual equivalent of 15%.It pays regular dividends quarterly providing a yield of 7.1%. But thanks to special payments, its dividend is closer to a yield of 8.3%. MFA Financial (MFA)Source: Chart by Bloomberg Banks used to be big in the mortgage business. That's been changing, particularly after 2007-2008. Now others are in the market to originate and own mortgages. Inside my model portfolios of Profitable Investing I have MFA Financial (NYSE:MFA) which is structured as a REIT under the Cigar Excise legislation noted earlier.MFA owns and runs a mortgage portfolio, which in turn fuels an ample dividend yielding 10.1%. And it has proven itself during times of adversary.Over the past ten trailing years MFA has delivered a return of 258.5% for an average annual equivalent of 13.6%. Buy it in a taxable account as 20% of its dividends qualify as deductible from income tax liabilities. That makes its payout distributions even more attractive after taxes.Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps -- and into safe, top-performing income investments. Neil's new income program is a cash-generating machine … one that can help you collect $208 every day the market's open. Neil does not have any holdings in the securities mentioned above. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks on the Move Thanks to the Davos World Economic Forum * Invest in America's Most Trusted Brands With These 7 Stocks to Buy * 7 Earnings Reports to Watch Next Week The post 4 Bank Stocks to Sell and 4 Cash-Generating Alternatives to Buy appeared first on InvestorPlace.
Intel Corp stood out with an 8.4% gain after the chipmaker forecast better-than-expected 2020 earnings, joining many of its peers to signal a recovery in chip demand. After a record open for the Nasdaq, Wall Street's main indexes lost ground as U.S. health officials confirmed a second U.S. case of the coronavirus in a Chicago woman and said as many as 63 potential cases were being investigated.
Wall Street came under pressure on Friday as investors sold energy, financial and healthcare stocks on mounting fears over the coronavirus outbreak in China, while strong gains for chipmaker Intel limited losses on the main indexes. The U.S. Centers for Disease Control and Prevention said a traveler from Wuhan, China had been diagnosed with the coronavirus in Chicago, Illinois, making it the second confirmed case of the virus in the country. The virus outbreak in China has killed 26 people and infected more than 800 in the past week, raising concerns about its fallout on the global economy.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
In a new interview from the World Economic Forum in Davos, Switzerland, Bank of America CEO Brian Moynihan credited innovation and a “capitalist spirit” in the U.S. with powering the country’s longest economic expansion in history.
Diversity and inclusion practices can pay off, whether you're a behemoth bank or a small industrial company.
One technology stock that deserves your attention, given its explosive gains over the past year and its huge potential in the long run, is Cardlytics (NASDAQ:CDLX) stock. At its core, this is a payment card analytics company, which leverages credit and debit card data to pair marketers with consumers and power relevant and strong bank loyalty and rewards programs.This business model is taking off. When Cardlytics hit the public markets back in early 2018, the company had only partnered with one major bank, Bank of America (NYSE:BAC), and had just 50 million active users. Today, Cardlytics has partnerships with JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC), too, and is approaching 150 million monthly active users, meaning that Cardlytics now has purchase data on essentially one out of every two card swipes in the U.S.That's a lot of data. And there's a lot of value in that data. As such, it should not be surprise that as Cardlytics has grown from 50 million users at its IPO to nearly 150 million users today, CDLX stock has roared from a $13 IPO price, to a $87 price tag -- while $90 earlier -- today.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, on the heels of such an enormous rally over the past two years, does CDLX stock have any more upside left?In the near-term, probably not. The valuation seems maxed out. But, in the long run, yes. Cardlytics is in the early stages of a huge multi-year growth narrative. Over the next few years, as this growth narrative plays out, CDLX stock will only go higher. Tons of Data From Billions of SwipesCardlytics stock has all the attributes of a long-term winner.The core of the Cardlytics business model is all about unlocking value in the vast world of credit and debit card purchase data. That is, banks around the globe have collectively issued billions of payment cards, and those billions of payment cards are used several times each year. Consequently, in any given year, banks are collectively producing billions upon billions of consumer purchase data points. * 9 Up-and-Coming Small-Cap Stocks to Watch So, Cardlytics created a platform aimed at tapping into that enormous payment card database. Their angle? Loyalty and rewards programs.The process is simple. Partner with banks. Gain access to all that data. Use that data to work with marketers to create highly personalized and tailored loyalty and rewards programs for the banks. Banks get increased customer spending. Marketers get increased product awareness and sales. Cardlytics gets a fee for setting it all up.Sounds genius to me. It's also sustainable, because in data businesses, scale matters. The bigger Cardlytics gets, the more data it has, and the better loyalty programs it can build. So, as more and more banks migrate to this data-driven loyalty program model, they will trust the biggest player, Cardlytics, to do the best job.Further, Cardlytics is primed for big growth because they only have 150 million monthly active users, and there are over a billion payment cards in the world. Even further, this is a relatively high-margin business with a lot of fixed costs, so sustained big revenue and user growth will inevitably drive positive operating leverage and result in huge profits. Cardlytics Stock is Maxed OutAlthough CDLX stock is a long term winner, a lot of that long term winning has already been done in the past year, with shares up 400% over that stretch. Going forward, near term upside in CDLX stock may be relatively muted by valuation friction.As is obvious, I'm bullish on Cardlytics' long-term growth prospects. My long-term model on the company reflects this bullishness. I assume that the company can sustain robust double-digit user growth for the next several years, thanks to increased U.S. penetration and some international expansion. I further assume that average revenue per user will trend higher, too, and that revenue growth will remain steadily north of 20% for the next few years.Other critical assumptions include relatively slow expense growth in the 10% to 15% per year range, sustained margin expansion, and significant profitability ramp into 2025.But, even under all those bullish assumptions, I still have a hard time justifying the CDLX stock price today.My long-term model pegs Cardlytics' earnings per share at $3.50 by 2025. Based on an 35x forward earnings multiple -- which is a medium-term average for application software stocks -- and a 10% annual discount rate, that implies a 2020 price target for CDLX stock of about $85. * The Top 5 Dow Jones Stocks to Buy for 2020 That's roughly where shares trade hands today. So, relative to the company's long-term profit growth prospects, Cardlytics stock is fully valued in the near term. Smart Company, Doing Smart ThingsI like Cardlytics. This is a smart company, doing smart things, with a ton of growth momentum, a long runway ahead to sustain that momentum, and a favorable financial profile that lends itself to robust long term profit growth potential. For all intents and purposes, CDLX stock is a long-term winner.But, shares have come very far, very fast, and appear fully valued in the near term. So, it's probably best not to chase this rally. Instead, wait for the stock to cool off. Wait for the inevitable hiccup and dip. Then, buy that dip.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Stocks That Cautious Investors Should Sell Now * 7 Healthcare Stocks With 100% Street Support * 3 Chinese Stocks to Buy, Sell, or Play from Either Side The post Cardlytics Stock is a Winner, but Beware Valuation Risks appeared first on InvestorPlace.
Hedge funds currently command some $3 trillion in assets under management. They're where millionaires and even billionaires put their cash to work. That alone makes them worth keeping an eye on - and one thing that's fairly consistent is their love for blue-chip stocks.Sure, hedge funds aren't what they used to be. Wall Street's former masters of the universe have lagged the performance of the S&P; 500 throughout the bull market. And as the ultimate example of active management, they charge exorbitant fees. But hedge funds' heavy investments in research helps managers lay claim to being Wall Street's "smart money."The folks at WalletHub keep regular tabs on stocks that hedge fund managers are buying, selling and holding every quarter. Combing through regulatory filings, WalletHub looks at the positions of more than 400 hedge funds, tallies their positions in individual stocks, then ranks those stocks by their total holdings value.These are primarily massive blue-chip stocks, ranging from the hundreds of billions of dollars to more than $1 trillion. Indeed, their very size helps attract more institutional interest. Unsurprisingly, then, most of these stock picks are big, stable names known to most Americans. A substantial number happen to belong to Warren Buffett's Berkshire Hathaway portfolio.Here are hedge funds' 25 favorite blue-chip stocks to buy now. All these stocks likely appeal to the smart money because of their size and strong track records. But we'll delve into a few specifics that make each company special. SEE ALSO: The 20 Best Stocks to Buy for 2020
(Bloomberg) -- Apple Inc. shares have been on a nearly uninterrupted move higher over the past several months, and analysts are starting to ask whether the rally might be overdone.The stock has already risen more than 8% in 2020, an advance that builds on 2019’s 86% rally, the biggest one-year percentage gain in a decade. Shares have hit repeated records over the advance, which has solidified Apple’s position as the largest U.S. stock by market capitalization.Shares of the company slipped 0.1% on Thursday.The gains have come on growing optimism over the company’s 2020 prospects, driven by improved China demand, growth in its services business, and strong sales expectations for wearable products like AirPods or the Apple Watch. In addition, it is expected to debut a 5G version of its iPhone this year, a product that is almost universally expected to be a blockbuster.“There is a perception of relative safety” in the stock, but the rally has resulted in a “historically high valuation,” according to KeyBanc Capital Markets. The share price “appears to require a sustained re-acceleration in top-line growth that we do not anticipate, while leaving little room for error.”In a note dated Jan. 22, analyst Andy Hargreaves reiterated his sector-weight rating on the shares, writing that the valuation “limits the potential for further multiple expansion” while exposing investors to a number of risks, including potential declines in average selling prices for the iPhone, “stagnating” user growth and brand risk in China.Apple is scheduled to report its first-quarter results later this month, and despite its long-term concerns, KeyBanc wrote the quarter should be “very good relative to consensus estimates.” This view was echoed by BofA, which also forecast a “strong” quarter, adding, “who doesn’t.”While BofA has a buy rating on the stock and raised its price target by $10 to $340 on Thursday, analyst Wamsi Mohan noted that upside potential over the longer term looked “more hazy.” The valuation is “at the high-end of the long-term range,” he wrote, and “further positive estimate revisions beyond [the first-quarter results] may be hard to achieve”, given headwinds related to tariffs, gross margins and operating expenses.The average price target on Apple shares stands around $296, according to data compiled by Bloomberg. While this is up from the $268 average at the end of 2018, it represents downside of nearly 7% from the stock’s most recent close.(Updates to market open in third paragraph)To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Steven FrommFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.