FFiirrsstt aannaallyysstt pprriiccee ttaarrggeett hhiikkee ffoorr AAppppllee
Apple Inc. (NASDAQ: AAPL) received its first formal price target hike of 2015 from the analyst firm Argus, expecting the technology giant to set records for total revenue, total smartphone revenue and net income in its first quarter of 2015.
For the first quarter, smartphones are expected to have contributed 60% of the company’s revenue. At the same time, its phone market share appears to be growing domestically and globally.
After a 10% earnings per share decline in 2013, Apple bounced back with 13% EPS growth in 2014. Argus expects double-digit earnings growth in 2015 and 2016 and maintained its Buy rating for Apple, but the firm raised its price target to $125, which implies an upside of 16.1% for 2015. The stock has a consensus analyst price target of $122.21, with the highest price target at $150, or upside of 39%. Looking at Apple’s performance in 2014, the stock gained more than 40%.
In the first quarter, Argus estimates that 67.3 mln iPhones were shipped, about 32% up year-on-year. The analyst firm is modeling a global average sales price of about $600, which would be down 6% y-o-y and flat with the prior quarter. On that basis, iPhone revenue is projected at $40.4 bln, up 24% y-o-y and 71% from the fourth quarter, a seasonally weak quarter for the iPhone.
In terms of the iPad, Argus is modeling 20 mln units sold, which would be up more than 60% sequentially. Unit sales, however, are likely to be down 20-22% y-o-y, as initial consumer fascination with this product has faded. Apple has responded by offering more models, and holiday-quarter total units likely benefited from robust sales of the iPad mini.
The Mac was the biggest surprise in Apple’s fourth quarter, with units up 21% y-o-y. The average sales price was about $1,200, down 2%. Total revenue rose by 18% to $6.62 bln. Argus expects this strong pattern to continue.
Shares of Apple were down over 1% at $108.40 in the first half of the trading day last Friday, in a 52-week trading range of $70.51 to $119.75.