Analysts raise Apple targets, see shares going as high as $156 after best-quarter ever

Posted:
in AAPL Investors
Led by the blockbuster debut of the iPhone 7 series, Apple exceeded Wall Street's expectations with its holiday quarter, sending shares of the company's stock higher and prompting analysts to revise their price targets upward.




In particular, Macquarie Securities, RBC Capital Markets, and Guggenheim all increased their estimates for AAPL following the company's December quarter results, which reached a record-setting $78.4 billion in revenue and $17.9 billion in net profit.

Analyst Ben Schachter of Macquarie, in particular, has the highest 12-month valuation for Apple at $156. In a note to investors on Wednesday, a copy of which was provided to AppleInsider, he said that the continues growth of Apple's "Services" business should command more attention going forward.

Driven by the success of the App Store, Apple's Services business drew $7.17 billion in revenue in the company's first quarter of fiscal 2017. With 30 percent growth year over year already, Apple has said it plans to double its Services revenue over the next four years.

Schachter has been bullish on Apple's Services business, but the ambition expressed by the company's management during its quarterly earnings conference call on Tuesday exceeded even the analyst's lofty expectations. As a result, he now expects that the Services business segment will generate 25 percent of Apple's gross profits in fiscal year 2017, despite accounting for only 13 percent of the company's revenue.




Amit Daryanani of RBC Capital Markets also increased his price target on AAPL from $125 to $140. Shares of the company exceeded $125 in intraday trading on Wednesday, overing above $127 as of publication.

Thanks to a number of factors -- including an anticipated "super cycle" for the rumored redesigned "iPhone 8," as well as the possibility of tax breaks for overseas cash --?Daryanani wondered if Apple could manage to exceed $10.00 in earnings per share.




Guggenheim analyst Robert Cihra also increased his target for Apple from $140 to $150, declaring the company's holiday quarter should be "more than enough to scare bears and wake up investors." He cited a number of upcoming catalysts, including the anticipated "iPhone 8," more than $231 billion in overseas cash that could be repatriated, and spending on research and development that has more than doubled over the last four years.

"We see investors being paid to own the stock," Cihra wrote.

Finally, Cowen and Company analyst Timothy Arcuri did not increase his price target from $135, but called that price now a "veritable layup." In his view, share prices as high as $150 would be possible if his bullish estimates hold.
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Comments

  • Reply 1 of 37
    sog35 said:
    Services, Services, Services.

    I've been saying this for over a year.

    We will see $150 this year. 
    I thought it was...

    Developers, Developers, Developers...

    😜
    cali
  • Reply 2 of 37
    red oakred oak Posts: 640member
    $150 as the target?   These analysts still have no understanding of this company 
    neil anderson
  • Reply 3 of 37
    NY1822NY1822 Posts: 591member
    where is Collin Gillis and his $85 price target?
    chiapatchythepirategilly0172old4funcali
  • Reply 4 of 37
    sog35 said:
    We will see $150 this year. 
    This may finally be the year your forecast comes true!

    (I, unfortunately, sold @ $111 to eliminate the stress of watching AAPL yo-yo based on fictitious analyst rumors.  Investing in individual stocks is for the strong-willed!)
    cali
  • Reply 5 of 37
    wood1208wood1208 Posts: 1,869member
    Now you know why legend Warren Buffet bought Apple stock when dipped around $92 and when the smartest analysts on wall-street and rest of world was convinced Apple is doomed. Now Warren is smiling and rest who believed others crying.
    edited February 2017 therunningvmnetmage2old4funwatto_cobrabaconstang
  • Reply 6 of 37
    linkmanlinkman Posts: 893member
    "We see investors being paid to own the stock," Cihra wrote.
    In other words, a dividend that has been paid every quarter since 2012?
  • Reply 7 of 37
    sflocalsflocal Posts: 4,493member
    sog35 said:
    We will see $150 this year. 
    Or what?  Promise to self-ban yourself again?  We know how well you keep promises.
    therunningvmSpamSandwich2old4funradarthekatwatto_cobra
  • Reply 8 of 37
    blastdoorblastdoor Posts: 1,893member
    sog35 said:
    Services, Services, Services.

    I've been saying this for over a year.

    We will see $150 this year. 
    Anybody know what fraction of an uber ride fee goes to Apple? 

    The transaction fee Apple gets from ApplePay is 0.15%
    The fee they get from app sales is 30%. 

    I'm guessing it's somewhere between those two numbers, but anybody know for sure what it is? 
  • Reply 9 of 37
    NY1822 said:
    where is Collin Gillis and his $85 price target?
    Check the nearest high rise building to his location.  Look towards the roof.
    therunningvmanantksundaramwatto_cobracali
  • Reply 10 of 37
    wood1208 said:
    Now you know why legend Warren Buffet bought Apple stock when dipped around $92 and when the smartest analysts on wall-street and rest of world was convinced Apple is doomed. Now Warren is smiling and rest who believed others crying.
    Having been in since $50 pre-split, I was literally walking in to work when the ticker showed this and bought every share I could.  The stock purchase mobile app locked up twice and was moving really slow from the traffic and seemed to not get the order placed.  After checking the execution status of the order I did find that it did in fact get placed.  The stock was so completely oversold at that point you had to be a fool not to buy if you had any non-essential money to purchase with.  Rear view mirrors have the best view obviously but that one you could see as it was happening.
    cali
  • Reply 11 of 37
    slurpyslurpy Posts: 5,115member
    Analysts are so fucking pathetic. When stock drops, they revise their future estimates down. When it rises, they reverse and raise future estimates. Utterly useless without a shred of vision. They have zero insight into what the fuck is happening beyond what is currently the case. They never take risk beyond being late to the game and assuming whatever weekly trend is happening will continue. Oh and sog, enough with your predictions, or, "declarations". You never follow-through so stop embarrassing yourself. Apple stock might or might not hit $150, but Apple has little control over that, regardless of their performance, and regardless of Cook, no matter how much you delude yourself that is the case.
    therunningvmStrangeDaysgilly017anantksundaramradarthekatcalijcdinkins
  • Reply 12 of 37
    sog35 said:
    Apple just booked almost $50 billion in gross services revenue



    Tim Cook expects this hits $100 billion in 4 years.

    That's bigger than Facebook and Google
    Who knew that book revenue was that high?  Now Apple makes more from selling books than selling music.  I had assumed that iBooks was a loser in the overall scheme of things, but it looks like it's growing nicely.
  • Reply 13 of 37
    brucemcbrucemc Posts: 1,519member
    sog35 said:
    Apple just booked almost $50 billion in gross services revenue

    Tim Cook expects this hits $100 billion in 4 years.
    That's bigger than Facebook and Google
    Just so everyone is clear, what Horace is highlighting is total revenue of transactions through Apple's services business - it includes the 70% that is paid out to developers w.r.t. the App Store.  This is different than what Apple reports on their income statement - which is "net" (excludes the developer portions paid out).

    It is a valid metric of course - most companies report total gross revenue: Walmart, Facebook, Amazon, etc.  But the net income % is much smaller - from low single digits % with Walmart to 20% ranges for Facebook and Google.

    In 2015, Facebook earned almost $18B in revenue, and Google $74.5B.  Both of those businesses have grown strongly since then.  So Apple's gross services revenue is not larger than Google, but is still bigger than FB (likely double).
  • Reply 14 of 37
    sog35 said:
    blastdoor said:
    sog35 said:
    Services, Services, Services.

    I've been saying this for over a year.

    We will see $150 this year. 
    Anybody know what fraction of an uber ride fee goes to Apple? 

    The transaction fee Apple gets from ApplePay is 0.15%
    The fee they get from app sales is 30%. 

    I'm guessing it's somewhere between those two numbers, but anybody know for sure what it is? 
    Absolutely ZERO.

    That is one change I want Apple to make. They need to charge at least 1-2% for any transaction that happens on an iOS app.
    They start making things more expensive then companies will just tell people to use the browser. If it's cheaper to sign up for something in Safari then in the actual app that's what I'm doing. these companies an app developers are going to just eat this 1-2%. They're going to pass it on to consumers. No thanks I already give Apple enough money.

    Apple makes close to $18B in profit in one quarter and you're complaining that they don't soak developers and other companies more. Sheesh. But of course we all know if the stock drops again you'll be here bitching about Cook and what a lousy CEO he is. 
    radarthekat
  • Reply 15 of 37
    sog35 said:
    Apple just booked almost $50 billion in gross services revenue



    Tim Cook expects this hits $100 billion in 4 years.

    That's bigger than Facebook and Google
    Who knew that book revenue was that high?  Now Apple makes more from selling books than selling music.  I had assumed that iBooks was a loser in the overall scheme of things, but it looks like it's growing nicely.
    Where is he getting this information from? Apple doesn't break out services revenue like that.
  • Reply 16 of 37
    We can thank Tim Cook and his huge stock buyback program for this.The revenue growth was a given with the extra week in the quarter but without the stock buyback we  wouldn't have seen growth in EPS and the stock would have tanked.Thank you Tim. 
    watto_cobra
  • Reply 17 of 37
    sog35 said:
    RonnnieO said:
    We can thank Tim Cook and his huge stock buyback program for this.The revenue growth was a given with the extra week in the quarter but without the stock buyback we  wouldn't have seen growth in EPS and the stock would have tanked.Thank you Tim. 
    If you listened to the conference call you would not have said such non-sense.

    1. The extra week was of little help since the 7+ was supply constraint. And so was Airpods and Watch.

    2. The extra week did not help in the compare YoY because the 7 sold a week earlier than last year. Meaning more launch phones were sold in the previous quarter (Sept) then last year.

    3. Last year there was a $700 million profit from the Samsung trial. No such thing this year

    4. Currency caused profits to be down 5% if not more.

    5. Apple was left with far less inventory this year than last year.  Apple's sell through was MUCH higher than last year.

    Taking all that into consideration Apple sales was up about $8 billion from last year. That is a MASSIVE number.


    My point was about the EPS. YOY net income was down but EPS was up because of the stock buyback.
  • Reply 18 of 37
    sog35 said:
    Services, Services, Services.

    I've been saying this for over a year.

    We will see $150 this year. 
    You also said about 1,000 times that Cook was an awful CEO and should be fired. So it's pretty hard to take much of your stuff seriously.
    SpamSandwich2old4fungilly017singularityradarthekatpscooter63watto_cobra
  • Reply 19 of 37
    wood1208 said:
    Now you know why legend Warren Buffet bought Apple stock when dipped around $92 and when the smartest analysts on wall-street and rest of world was convinced Apple is doomed. Now Warren is smiling and rest who believed others crying.
    The anal-ysts are joke. I had a good laugh when the numbers came out. This is America today bunch of whiners and complainers. Apple doomed my ass. LOL. 
    watto_cobracali
  • Reply 20 of 37
    sog35 said:
    sog35 said:
    Services, Services, Services.

    I've been saying this for over a year.

    We will see $150 this year. 
    You also said about 1,000 times that Cook was an awful CEO and should be fired. So it's pretty hard to take much of your stuff seriously.
    So your opinion of people don't change when the facts change?

    The facts changed. Airpods changed everything IMO. 
    I believe part of the criticism of your predictions and seemingly endless complaints previously related to the Beats acquisition and also the insistence Apple would hit a target price and you subsequently refused to "self-ban" after promising to do so after the target you picked was not met. Your insulting and attacking others at the same time also didn't help matters.
    edited February 2017 radarthekatpscooter63
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