FFi­irrsstt aan­naal­lyysstt pprri­ic­cee ttaar­rggeett hhi­ik­kee ffoorr AAppp­pllee

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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