An­a­lysts take pos­i­tive view on Ap­ple, all for dif­fer­ent rea­sons

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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