Why Apple gets higher market share and a higher analyst price target
Coming off a strong keynote presentation, Apple Inc. (NASDAQ: AAPL) is ready to take the market by storm with its new promotions. Despite the market sell-off in August, Apple has weathered it well and now has plans that will further help it take control and grow its market share in the high-end smart phone market. Canaccord Genuity reiterated a Buy rating and raised its price target to $160 from $155, implying an upside of 40% from current prices. At the same time, the firm increased its calendar 2015 and 2016 earnings per share (EPS) estimates to $9.17 and $10.22 from $9.01 and $9.64, respectively.
This rating is based on the firm’s survey work and analysis of leading carrier store traffic and price promotions, and it anticipates Apple will maintain very strong share of the premium tier smartphone market. In fact, Canaccord Genuity believes the iPhone 6s products should enable Apple to continue to post strong sales and high-end smartphone market share gains, as it believes the iPhone 6/6s Plus smartphones generated very strong replacement sales from existing iPhone consumers who slowed the pace of iPhone upgrade purchases during the relatively disappointing iPhone 5 and 5s product cycles.
Another prediction the firm has is that the new Apple instalment plan programmes combined with similar to more aggressively priced instalment programmes from leading carriers will improve the rate of iPhone upgrade sales to the growing installed base of iPhone users. In fact, with only 27% of the iPhone installed base having upgraded to the iPhone 6/6 Plus devices by the end of the fiscal third quarter of 2015, Canaccord Genuity anticipates continued strong replacement sales through the 2015 calendar year and beyond.