RBC ups Apple price target to $110 in anticipation of 'busy fall' for iPhone & 'iWatch'
Following Apple's record earnings report this week, investment firm RBC Capital Markets raised its price target to $110, recommending that investors buy ahead of what is expected to be a "busy fall" for the iPhone maker.
Analyst Amit Daryanani issued a note to investors on Wednesday, a copy of which was provided to AppleInsider. In it, he has maintained his firm's "outperform" rating, and raised the target on AAPL stock from $100 to $110.
With $164 billion in cash amounting to a whopping $22 per share, Daryanani believes shares of Apple are undervalued at their current levels. And in terms of its product lineup, he sees continued growth opportunities in both the tablet and smartphone spaces.
Along with his new current target of $110, Daryanani has an "upside scenario" for Apple of $125 per share. He could see the company reaching that level if Apple were able to penetrate the low-end smartphone market while maintaining margins at or above the 40 percent level.
At its current sub-$100 price, Daryanani believes shares of Apple are at an attractive entry point for investors to benefit from the company's ability to sustain revenue and earnings-per-share growth through fiscal year 2015.
Among the catalysts he sees for Apple moving forward are ramp-up in availability of an anticipated "iPhone 6," new iPad models this fall, the potential for major new product lines such as a so-called "iWatch," and improvements in the company's capital allocation policy.
"We believe AAPL has multiple levers ahead of it that will drive further revenue acceleration," he wrote. "Notably, we believe emerging market penetration will remain a key and material revenue driver for the company over the next several years."
RBC joins a number of investment firms that have increased their price target on AAPL in recent weeks ahead of the lucrative fall shopping season. Other firms include UBS ($115), Barclays ($110), Evercore ($115), Morgan Stanley ($110), J.P. Morgan ($108), and Needham ($97).
Analyst Amit Daryanani issued a note to investors on Wednesday, a copy of which was provided to AppleInsider. In it, he has maintained his firm's "outperform" rating, and raised the target on AAPL stock from $100 to $110.
With $164 billion in cash amounting to a whopping $22 per share, Daryanani believes shares of Apple are undervalued at their current levels. And in terms of its product lineup, he sees continued growth opportunities in both the tablet and smartphone spaces.
Along with his new current target of $110, Daryanani has an "upside scenario" for Apple of $125 per share. He could see the company reaching that level if Apple were able to penetrate the low-end smartphone market while maintaining margins at or above the 40 percent level.
At its current sub-$100 price, Daryanani believes shares of Apple are at an attractive entry point for investors to benefit from the company's ability to sustain revenue and earnings-per-share growth through fiscal year 2015.
Among the catalysts he sees for Apple moving forward are ramp-up in availability of an anticipated "iPhone 6," new iPad models this fall, the potential for major new product lines such as a so-called "iWatch," and improvements in the company's capital allocation policy.
"We believe AAPL has multiple levers ahead of it that will drive further revenue acceleration," he wrote. "Notably, we believe emerging market penetration will remain a key and material revenue driver for the company over the next several years."
RBC joins a number of investment firms that have increased their price target on AAPL in recent weeks ahead of the lucrative fall shopping season. Other firms include UBS ($115), Barclays ($110), Evercore ($115), Morgan Stanley ($110), J.P. Morgan ($108), and Needham ($97).
Comments
Originally Posted by sog35
I have been much more accurate then these clowns
Prove it. I want to see scanned and notarized copies of emails, with timestamps.
On a related note, I correctly predicted the closing price of AAPL stock correctly for the last 17 years. 100%. Trust me, it's true.
http://venturebeat.com/2014/07/23/apple-is-working-with-swatch-others-on-a-family-of-smartwatches/
My target is $110 EOY
$125 by Feb2015
I have been much more accurate then these clowns
When the stock was $400 last year my target was:
$82 EOY
$100 July2014
I tend to agree with the exception of the upper end could reach $150-$200.
Reason: iWatch
This is the only product that Apple will make that people may want to own more than one (possibly the iPod being the exception). People who are into time pieces may own several. Casual, evening out, gifts, etc.
Apple has endless reason to release new watches outside the technology cycle. Having the iOS tech the same, Apple can create watches with many, many different faces and mechanics. Such as the Kairos.
Events:
Father's day
Mother's day
Graduation
Birthday
Christmas (or your holiday of choice)
Anniversary
Ive Signature Addition (micro signed by Sir Ive himself)
Retirement
Materials: each with a number of leather/metal band combinations.
Aluminum
Titanium
Liquidmetal
Platinum
Don't forget a number of diamond combinations!
I bet you could add several to the event list yourself. These event watches can be released to be timed (yes) with their event, and just during the year. Technology releases as normal schedule allows.
No other product that Apple has released gives them this flexibility and ability to sell multiple devices to the same person. They can release a new watch face every quarter for the next 10 years and not run out of ideas.
[fanboy out of breath from excitement, must go rest....]
Touché.
On a related note, I correctly predicted the closing price of AAPL stock correctly for the last 17 years. 100%. Trust me, it's true.
Prove it. I want to see scanned and notarized copies of emails, with timestamps.
How do you plan to meet these targets - late nights, early mornings, skipping lunch, lots of meetings? The problem with setting targets for other people is you have no control over anything relating to them meeting those expectations.
Apple's been helping drive the stock price up and there's more of that activity to come:
http://www.fool.com/investing/general/2014/07/21/how-much-stock-did-apple-inc-repurchase-last-quart.aspx
$125 by Feb 2015 would need them to buyback $130-168b worth of shares, they only make ~$7-13b per quarter net income and there's only 2 more quarters before Feb 2015. Their goal isn't solely to keep the stock price high, they have other things they need to use the cash for.
The iPhone 6 will likely be a big hit but it remains to be seen if unit volume growth will result in significant profit growth. It's great if they do grow profits and unit volume and everything goes up but with the split price, I think people are getting more carried away with valuations than before. When it was around $600, a $50 increase seemed feasible and now people look at and still think $50 but that's now a 7x higher increase. A $25 jump now is equivalent to $175. It's not totally unrealistic but it seems a bit impetuous to expect that kind of jump so soon. All that happens if they hit that is some people will want it higher still. Sooner or later, people will have to be content with a valuation because it simply won't keep going up.
The iPhone 5 grew revenue and unit volume significantly but profit was flat. They had 29% unit growth vs the 4S but the same net income. If they replicated that unit volume growth, they'd top 61m units but again, net income could grow much less than that if margins are squeezed due to higher cost components. I think if they can convince irrational traders to maintain their fictional company valuation around $100-105, that would be just fine.
As cool as the idea sounds, I believe, and I might be totally wrong, that nothing earth-shattering is going to come from this.
They showed 20% EPS growth, their profit growth was $7.7b vs $6.9b = 11.6%. The EPS growth is higher because they were buying back shares.
They have made a commitment of a $90b buyback before December this year of which $51b has been made so that will indeed help drive the share price up around 8%, though likely not immediately. To reach $125, they'd need to show income growth on top of that of about 20%. In other words, just over 60m iPhones at the same margins, which is perfectly reasonable.
But this is assuming that the present company share price is not already high and the margins don't fall due to more expensive components. The present share price might be at this level because people who are buying shares now are anticipating earnings growth so the biggest impact will be from the share buyback.
I think he might have been pulling your leg.
Prove it. I want to see scanned and notarized copies of emails, with timestamps.
Perhaps his hard drive crashed, with zero backups :P