Bullish Ap­ple an­a­lyst gets even more bullish

Financial Mirror (Cyprus) - - FRONT PAGE -

Ap­ple Inc. (NAS­DAQ: AAPL) re­ceived a favourable an­a­lyst call on Mon­day from Canac­cord Ge­nu­ity fol­low­ing its re­cent earn­ings re­port. The call was made based on the grow­ing iPhone user base, which should drive steady long-term sales and strong cash flows.

Anal­y­sis from Ap­ple’s fis­cal first quar­ter in­di­cate that the com­pany dom­i­nated the smart­phone mar­ket in the De­cem­ber quar­ter, cap­tur­ing 93% of in­dus­try prof­its.

Canac­cord Ge­nu­ity be­lieves that strong iPhone 6 re­place­ment sales should con­tinue in 2015 with only 15% of 404 mln iPhone users hav­ing up­graded to the new de­vices.

Over the longer term, a grad­u­ally mod­er­at­ing growth rate is ex­pected be­tween 2016 and 2018, with 650 mln iPhone users by the end of that term, while in 2018 global pre­mium smart­phone sub­scribers are an­tic­i­pated to to­tal 1.82 bln.

Canac­cord Ge­nu­ity be­lieves that the mod­est base growth ex­pec­ta­tions, cou­pled with long-term re­place­ment sales, would po­si­tion Ap­ple for steady sales of $210-215 mln iPhone units an­nu­ally be­tween the 2015 and 2018 cal­en­dar years.

Th­ese lev­els should gen­er­ate strong an­nual cash flows to eas­ily fund a long-term cap­i­tal re­turns pro­gramme. Ap­ple could fur­ther mon­e­tise this large iPhone user base through ad­di­tional prod­ucts, soft­ware and ser­vices to help drive on­go­ing long-term sales growth. As a re­sult, Canac­cord Ge­nu­ity is set­ting its 2016 earn­ings per share (EPS) es­ti­mate at $9.42. The firm’s price tar­get of $145 is based on a mul­ti­plier of 15 times 2016 cal­en­dar year EPS, and just above $140 seen by Credit Suisse.

Ap­ple shares were up about 0.5% at $119.55 on Mon­day. The stock has a con­sen­sus an­a­lyst price tar­get of $131.20 and a 52-week trad­ing range of $73.05 to $120.51.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.