FORTUNE — After a string of analysts dropping their price targets in lockstep with Apple’s (AAPL) falling shares, it’s refreshing to hear from a couple of guys who haven’t lowered their targets. Or at least not lately.
Bernstein’s Toni Sacconaghi ($725, down from $800 last December) weighed in Tuesday with his views on the much-rumored Apple iWatch. He’s skeptical, given his calculation that a watch is, as he puts it, “unlikely to be significant financially for the company.” But he sees the value of proving to investors that Apple hasn’t lost its innovative touch.
“We believe that for Apple’s stock price to ‘work’ again,” he writes, “consensus estimates need to be realistic, and investors need to believe that innovation remains strong, with the company able to introduce exciting new offerings into its base of loyal customers, with minimal cannibalization risk. To that end, a successful watch introduction could ultimately be favorable for the stock, particularly if the product is compelling enough to trigger positive estimate revisions.”
Topeka’s Brian White ($888, down from $1,111 in January) offers a three-step program designed to lead Apple into what he calls a “sustainable stock recovery.”
Phase 1: Pay out more cash to win over value investors and stabilize the stock price
Phase 2: Work through the upcoming “trough” in Apple’s profit cycle (White estimates a -19% decline year-over-year in fiscal Q2)
Phase 3: Tap into new growth opportunities such as 1) a lower-price iPhone to get a foothold in the 60% of the smartphone market the company is currently missing out on, 2) a deal with China Mobile (CHL) to reach its 715 million subscribers, 3) some totally new product categories such as — you guessed it — an iWatch and an iTV