Analysts take positive view on Apple, all for different reasons
As the largest company in the world by market cap and one of the most widely traded, Apple Inc. (NASDAQ: AAPL) garners a large amount of attention from analysts. For the most part, when analysts weigh in on Apple they are generally in consensus, but not necessarily for the same reasons. However, 24/7 Wall St. has come across a few recent analyst calls that all take a positive perspective on the iPhone giant for a few different reasons.
Credit Suisse has an Outperform rating with a $140 price target, implying over 30% of upside for the stock. The brokerage firm’s reasoning behind it was that Apple just released updates to its iPhone portfolio, a new iPad Pro, additional Apple Watch bands and software updates for iOS and tvOS. The firm believes that the releases complement Apple’s solid portfolio in the compute market.
As widely expected, Apple released a fourinch iPhone SE, and Credit Suisse sees these new key features and the attractive price point of $399, as a solid move for the iPhone business for a few reasons.
First, the device compares favourably with competitive products in the $300-to-$500 average selling price smartphone segment. Second, the firm sees it as additive to units, projecting about 18 million to 30 million units for iPhone SE, in calendar years 2016 and 2017, respectively.
The firm gave its valuation as: “We continue to believe that Apple looks inexpensive on a P/E ex-cash basis of 9-times in the context of material capital return, sustainable revenues, and a powerful ecosystem. We apply a 12-times multiple and add back fully taxed net cash per share of about $15, giving upside to $140.”
Merrill Lynch reiterated a Buy rating and $130 price target. This firm sees another launch aimed at transforming health care. Laying the foundation to transform care, Apple announced the launch of CareKit, which will be available in April. HealthKit, (launched in June 2014) serves as a central data collection point for a comprehensive health profile and ResearchKit (launched in March 2015) allows for wider spread and more frequently collected data for medical studies.
The launch of CareKit aims to transform the way patients are monitored in between physical medical visits, marking the next step in Apple’s strategic positioning to be a leader in the evolution of health care, empowering individuals with their unique health data to improve the quality of care. Apple’s recent focus on health care is consistent with Merrill Lynch’s longer term thesis of Apple becoming a significant player in in the health care industry.