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Goldman Sachs says sell Apple, chart analyst says otherwise

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Trading Nation: Goldman says Apple could fall 20%, but these experts disagree

Apple faces an uphill battle on iPhone demand, says Goldman Sachs.

The firm on Friday downgraded Apple stock to sell, forecasting a drop in demand for its smartphone devices and predicting a long recovery period.

Not all market watchers agree.

Craig Johnson, chief market technician at Piper Sandler, said consumers waiting for the rollout of 5G, the next generation of wireless communications,  a possible reason for the current suppressed demand.

"Look at the slowdown — you could potentially see [it anyway] here as what you would except ahead of the 5G launch of the phones," Johnson said Friday on CNBC's "Trading Nation."

The charts also support some improvement in share price performance, he added.

"The shares have already pulled back, successfully retested a very big long-term support area around $230 here, and I don't see that begin to be broken again. I think this is a time on any sort of pullbacks that we want to be buying Apple shares," he said.

Apple was trading around at $280 in Monday's premarket. 

Chad Morganlander, portfolio manager at Washington Crossing Advisors, is more cautious on growth-focused stocks such as Apple.

"Our long-term expected returns for these types of large-cap growth companies right now is 5.8%. We think that the better scene of opportunity, kindly, is large-cap value companies with a long-term expected return of 8.8%," Morganlander said during the same interview.

Growth stocks are a bet on future earnings — investors are more willing to pay higher valuations on the expectation of future growth. Value stocks are those viewed as "cheap" relative to their valuations. Apple trades at 21 times forward earnings, higher than the S&P 500's 19 times.

"Valuation does matter," Morganlander said.

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