AppleInsider Staff
British banking giant Barclays this week raised its price target for Apple shares to $140 from $120, saying that increased customer demand for larger-screened iPhones and iPads, the introduction of the Apple Watch, and the unveiling of new services like Apple Pay could significantly expand the company's margins.
Barclays analyst Ben A. Reitzes made the change in a note to investors, a copy of which was provided to AppleInsider. Reitzes believes that Apple's share price is strongly correlated to its margins, and sees the new releases increasing those margins going forward.
Specifically, Reitzes feels that current margin estimates fail to properly account for the record-setting sales pace of the iPhone 6 series. The iPhone 6 was the top seller at each of the big four U.S. carriers in November, while the iPhone 6 Plus swept second place.
In addition, he sees the Apple Watch as a "high-margin" device, though it is unclear whether that is based on the announced pricing for the Sport model or on projections for the cost of the Apple Watch and Apple Watch Edition versions. Expectations for Apple Watch sales run the gamut from bearish to bullish, though Swiss bank UBS recently predicted that the Cupertino company could move as many as 24 million of the devices in fiscal 2015.
Finally, Reitzes cited Apple Pay and other "soon to be announced" digital services as sources of relatively low-overhead recurring revenue that would boost margins. Those other services are not named, but could include the rumored rebranding of Beats Music that is expected to come alongside a significant price cut for the streaming service.
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
51 Comments
The target prices' fever is on!
doomed i tell ya. doomed.
Yes, we AI fanboys want Apple to thrive forever but it is, after all, a business. Think of every well known, iconic, successful tech business and they all had their day in the sun, stumbled, recovered, stumbled again, and so forth (Microsoft, HP, Dell, Sony, Blackberry, Nokia, IBM). Apple has an unparalleled management team at this time, is firing on all cylinders, can do almost no wrong, and has a loyal customer base that other CEOs would sell their grandmothers into slavery to have. I hope it continues for a long time but nothing is forever. The long knives are always out, waiting for the stumble and the opportunity to attack the big guy when he’s down on one knee.
The race has officially started. I guess the analyst that gives Apple the highest price target get some sort of a prize or honorable mention. Normally Brian White always wins with his off-the-wall moonshots of calling ridiculously high numbers that no one else would be crazy enough to try and beat. I'm going to sit back today and see how small a jump Apple's share price will likely rise. Any other stock would make a huge jump but I'm willing to bet Apple's share price moves less than one percent based on that 17% increase of price target call. It really doesn't matter because analysts are not the actual investors. No group of investors except Carl Icahn wants Apple's share price to increase dramatically especially if they don't have enough money invested in Apple. Most will be johnny-come-lately investors hoping to grab onto Apple's tail now that they've discovered Amazon isn't going anywhere. Apple will have a very solid quarter and I'm sure some increased dividends will be forthcoming. Apple is on fire but those talking heads at CNBC will try to douse the fire claiming how Apple has peaked and can go nowhere but down. If Apple reaches $120 a share by the end of the year, I'll be more than satisfied. Apple appears to have plenty of legs to run higher next year if the economy doesn't jump the tracks. Lower gasoline and heating fuel prices will give consumers more money to spend on tech gadgets.
Yes, we AI fanboys want Apple to thrive forever but it is, after all, a business. Think of every well known, iconic, successful tech business and they all had their day in the sun, stumbled, recovered, stumbled again, and so forth (Microsoft, HP, Dell, Sony, Blackberry, Nokia, IBM). Apple has an unparalleled management team at this time, is firing on all cylinders, can do almost no wrong, and has a loyal customer base that other CEOs would sell their grandmothers into slavery to have. I hope it continues for a long time but nothing is forever. The long knives are always out, waiting for the stumble and the opportunity to attack the big guy when he’s down on one knee.
Getting the big guy down on one knee is the first major hurdle. It's interesting to me that Apple differs in that it's rise has meant the collapse of so many formerly market-leading competitors. I don't know of another business that has been responsible for so much disruption of competition in multiple spheres. Microsoft's rise certainly spelled the end for a few competitors in the CPM market, and some software businesses along the way, but nothing of the magnitude of Apple coming into the smartphone business and, over a period of years, decimating the businesses of Nokia and Blackberry (two of, if not the, leading companies in that realm), or the magnitude of the shift in the PC market with the rise of the iPad, defining the post-PC era, or the wholesale restructuring of the music business in the era of the iPod. Getting this company to its knees will be some feat of competitive prowess.