Apple premium to big tech ‘justified,’ could expand further, says Evercore ISI

Evercore ISI analyst Amit Daryanani notes that investors "have been somewhat critical" of the firm’s recent bullishness on Apple (AAPL), with a notable focus on how Apple’s current valuation is at a premium to big tech peers such as Amazon (AMZN), Meta (META), Alphabet (GOOGL) and Microsoft (MSFT). However, the firm argues that Apple’s premium is "not only justified but could further expand" in the current macro backdrop given the company’s premium efficiency metrics, solid free cash flow and capital return and the fact that it lacks the kinds of "$30B capex plan" or "massive layoffs" that some of those peers are facing. Apple "never hired aggressively through the pandemic and doesn’t need to go through extensive headcount reductions unlike peers," added the firm, which continues to think consumer staples and/or high-end luxury companies remain the relevant peer group for Apple, on which Evercore keeps an Outperform rating $190 price target.