Brean Capital kicks off coverage of Apple stock with $160 price target

Posted:
in AAPL Investors edited April 2015
Brean Capital began coverage of Apple stock on Monday, calling for a $160 price target, and for revenue to beat Wall Street consensus for the next three years, driven by higher-than-expected iPhone sales.




Analyst Ananda Baruah issued a note to investors on Monday, a copy of which was provided to AppleInsider, forecasting annual revenue figures for 2015 to reach $232 billion. He sees Apple's revenue ballooning to $295 billion by 2017, exceeding Wall Street expectations.

Brean shipment figures call for 228 million iPhones in 2015, above market consensus of 222 million. This alone is anticipated to boost Apple's outlook, but Baruah further estimates than iPhones typically carry a gross profit margin of 45 percent, exceeding the roughly 40 percent margin for Apple as a whole.

The iPhone 6 Plus is thought to have an even greater 60 percent margin, and account for as much as a third of iPhone shipments, compared with a Street-suggested proportion closer to a quarter.

On the matter of operating expenditures, Baruah said that the company should be able to ramp them down, percenage-wise, now that both the iPhone 6 and the Apple Watch have been released.

Apple is set to announce March-quarter results later on Monday. The centerpiece of the announcement will be a conference call with analysts and journalists scheduled for 2 p.m. Pacific time, or 5 p.m. Eastern.

Comments

  • Reply 1 of 14

    Is this the same firm that had to change its name from Brean Murray Carret & Co. because of securities fraud?

  • Reply 2 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    I'm very optimistic, but even I am not anticipating above $140 by the end of the year.
  • Reply 3 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    sog35 wrote: »
    Then you are not optimistic at all.

    Stock is at $133 and $140 is only 5% away.

    I am optimistic. I am also anticipating a market correction soon. How big? I cannot say.
  • Reply 4 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    sog35 wrote: »
    Then you are not optimistic.  5% is not worth the risk of holding a stock. Better off going to an index fund

    I am optimistic. I also hold much, much more AAPL than you do and that gives me a good laugh. I'm not worried about near term fluctuations, whereas you seem far more concerned. If you are absolutely sure of your $150 target why wouldn't you ignore your own 20% rule? A completely optimistic person would shift 100% of their holdings to AAPL.
  • Reply 5 of 14
    I think AAPL will hit $140 in after-hours trading and then $160 by EOY. 60 million phones, a 10% bump to the dividend, and $20 billion added to the buyback all seem like bullish but realistic indicators. Good luck to all.
  • Reply 6 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    sog35 wrote: »
    You are not optimistic.  A gain of 5% is what most people think the broad market will return this year.  Why would you take on the added risk of an individual stock if you think you will only get a gain similiar to a way less risky index fund?

    Is all about risk vs reward.  If I thought Apple was only going up 5% this year I would just invest in a index fund that I think will return 5%.

    If you are optimistic you would think that Apple would out perform the broad market and additional return for the added risk of being concentrated in one stock.  

    I think Apple will reach $150 which is about a 13% return which is significantly higher than what I think the broad market will return.

    And just because I think Apple will outperform the broad market does not mean going 100% in Apple is the right move.  Again you need to take risk into consideration.

    To clarify I think your 2015 price target of $140 is not optimistic.  I'm not saying you are not optimistic about Apple for 2016-2020, just talking about your 2015 target.

    Now if you think the broad market will go down this year then yes you are optimistic since you think Apple will out perform the broad market (taking risk involved)

    If you are certain of your $150 target then your insistence on a very conservative 20% allocation for AAPL is nonsensical. You're either optimistic and certain or you aren't, because any short term risk would be irrelevant compared to the long term gain.

    Face it, you're a timid day trader, not a confident long term investor and yes, I do believe the broader market will see another bubble and I'm still going to be in the market. If Apple sees a dramatic price drop for any reason I'll be buying more.
  • Reply 7 of 14
    slurpyslurpy Posts: 5,076member

    My portfolio is like 60% Apple. Is it a huge risk? Yes. Has it served me well? Yes. 

  • Reply 8 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    sog35 wrote: »
    20% allocation on a single stock is NOT conservative.  Look at any hedge fund/mutal fund and 99% of them do not have a 20% concentration in a single stock.  One exception was a guy who managed a fund that was 100% Apple.  He went broke in 2013 and his clients lost millions (Andy Zaky).  So just because I don't invest every single cent I have in ONE STOCK I'm timid?  LOL.  whatever dude.  

    Just because I'm confident Apple will see $150 this year does not mean it will.  No one can say anything with 100% certainty in the stock market.  If that was the case I would be a billionaire.  All I'm saying is Apple has a very high probability of reaching $150, but its not 100%.

    Your target of $140 is weak and implies a PE ratio of below 10 after you take out cash.  Which is insane for a company that is growing revenue 30%+ and EPS 45%+

    All I'm saying is your $140 target for 2015 is not optimistic.  A mere 5% return is not optimistic for a stock like Apple that can easily go down 5% in a week.  Apple's return the last five years is 40-50% annualized return.  Yet you think a 5% return this year is optimisitic?  LOLLLOOLOLOLL.

    Now if you say your target is $140 this year but your LONG TERM view is optimistic that would make sense.  

    P/E ratio has historically proven to be a useless indicator for AAPL. Quite honestly, consumer sentiment is a better indicator of their strength or weakness going forward. The day Apple is universally loathed I will sell everything.
  • Reply 9 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    sog35 wrote: »
    Look at the PE ratio in early 2013.  Extremely low.  And it was a great time to buy the stock.  Its up about 100% since then.

    PE ratio was low in Jan 2012 also.  The stock ripped 60% in 8 months.

    All you really need to do is look at the short term gains minus capital gains costs and expenses, versus long term gains and not attempting to time the market.

    Whenever I see a massive stock fluctuation, whether caused by general market pressures or fabricated analyst pressures, I'll buy or consider buying more. I see no reason to sell.

    This is why Wall Street both loves and fears Apple. They are infinitely manipulable based on emotion, rather than pure mathematical or financial analysis. Compare with massively money losing Amazon. Wall Street is a circus.
  • Reply 10 of 14
    schlackschlack Posts: 676member
    Quote:
    Originally Posted by SpamSandwich View Post





    If you are certain of your $150 target then your insistence on a very conservative 20% allocation for AAPL is nonsensical. You're either optimistic and certain or you aren't, because any short term risk would be irrelevant compared to the long term gain.



    Face it, you're a timid day trader, not a confident long term investor and yes, I do believe the broader market will see another bubble and I'm still going to be in the market. If Apple sees a dramatic price drop for any reason I'll be buying more.

     

    Honestly, you either know very very little about investing concepts or you are making outrageous claims to provoke a response.  

     

    No one in their right mind would consider putting 20% of their wealth in a single stock to be conservative or very conservative. This is a high risk move...objectively speaking. I have about 10% of my wealth in Apple because I'm bullish on the stock.

     

    It also sounds like you have very little money invested. I can't imagine someone with $500K or $1M+ saying the kind of crazy stuff you're saying.

  • Reply 11 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
    schlack wrote: »
    Honestly, you either know very very little about investing concepts or you are making outrageous claims to provoke a response.  

    No one in their right mind would consider putting 20% of their wealth in a single stock to be conservative or very conservative. This is a high risk move...objectively speaking. I have about 10% of my wealth in Apple because I'm bullish on the stock.

    It also sounds like you have very little money invested. I can't imagine someone with $500K or $1M+ saying the kind of crazy stuff you're saying.

    I assure you I have a very large investment in AAPL and I'm comfortable with fluctuations that would give most investors heart attacks. This wasn't always the case. After having gone through the dotcom implosion and the 2008 meltdown, I've gotten used to seeing huge losses on paper and not panicking too much. ???? Those times are opportunities, not the time to run screaming.
  • Reply 12 of 14
    SpamSandwichSpamSandwich Posts: 30,412member
  • Reply 13 of 14
    I don't think any of the price targets are worth paying attention to because apple is in a new state of change. Within 3 years of the new campus I think the product catalog will more than double in size and variety from where it is today.
Sign In or Register to comment.