Why can Apple withstand economic downturns?

If you are looking for a tech stock that is consumer-friendly and has a strong international influence to protect your investment portfolio from the impact of the US economic downturn, Apple may fit the bill.

As concerns about the economic recession intensify, American consumers may be more cautious about buying Apple, but consumers in China and India are still looking to upgrade their phones.

"Analysts say this makes Apple a potential winner even as the macroeconomic environment continues to deteriorate."

Still relying on Apple

Apple's profit growth in the second quarter was driven by sales of Apple.

KeyBanc Capital Markets analysts emphasized that while sales in the US were lower than expected, the accelerated growth in China and emerging markets globally was a key reason for optimism.

KeyBanc analyst Brandon Nispel said, "With record active device installations in all regions and all product categories, investors may continue to ignore the noise of quarterly performance because Apple may be better able to adapt to the macroeconomic environment than ever before."

KeyBanc raised its target price for Apple stock from $177 to $180 and reiterated its buy rating.

Betting big on the Indian market

If China is currently Apple's most prominent market, analysts hope it can replicate that success in India.

After opening its first Indian store earlier this year, Apple is now planning to make a bigger push into this market dominated by Chinese brands.

DA Davidson analyst Tom Forte said, "We still expect Apple to mimic its strategy in China in India, but we believe it will take a long time for Apple's sales in India to reach 5% to 10%."

Davidson raised its target price for Apple from $173 to $193 and reiterated its buy rating, citing increased expectations for near-term profitability.

What is Apple's valuation?

On Friday, Apple's stock price rose 2.4% in pre-market trading to $169.70. The stock has risen 28% so far this year.

According to FactSet, Apple's current stock price is about 26 times its expected earnings for the next 12 months, higher than its five-year average of about 22 times.

Although Wall Street generally believes that the company's sales for the current fiscal year may decline slightly, analysts still believe that the company can withstand the cyclical decline in consumer spending.

Evercore ISI analysts reiterated their "buy" rating on Apple stock with a target price of $190.

They believe that Apple's performance demonstrates its "consumer staple" attributes and investors' view of Apple as a freely disposable technology product.