Apple Inc.'s stock ran up 1.4% in premarket trade Wednesday, after it was added to the conviction buy list at Goldman Sachs, which says it is being undervalued in the market. Analyst Simona Jankowski kept the rating at buy and the 12-month stock price target at $163, which is 43% above Tuesday's closing price of $113.69. Jankowski said Apple's stock trades at an price-to-earnings value that is 30% below the S&P 500 valuation, because Apple is being valued as a "hardware" company, with a transactional model and limited recurring revenue and visibility. "We expect that over the next year, the focus will shift from unit growth (which is slowing given a maturing smartphone market) to installed base monetization and recurring revenues ("Apple-as-a-Service")," Jankowski wrote in a note to clients. Jankowski said the company is already tilting that way, with its new iPhone 6s installment plans, and with the upcoming TV service the next step. Goldman's conviction buy lists include buy-rated stocks with higher return potential. The stock has slipped 2.4% over the past three months through Tuesday, while the Dow Jones Industrial Average has eased 0.1%.
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