Roger Fingas
Apple stock should bounce back to $130 by the end of the year, helped by solid iPhone sales and high profit margins, a Brean Capital research memo argued on Monday.
Brean's latest forecasts call for Apple to ship 47 million iPhones in the September quarter, and 72 million in the December quarter, according to analyst Ananda Baruah. Gross margins are predicted to hit 39.8 percent and 40.4 percent respectively, above Wall Street consensus estimates of 39.3 and 39.8.
Those numbers could deliver estimated earnings-per-share figures of $2 and $3.29, over consensus predictions of $1.87 and $3.19.
In general Street figures are too low through 2017, Baruah said. Aside from high margins and better iPhone performance — including more 6 Plus sales than anticipated — the company should theoretically have more operational expenditure leverage in 2016 as it benefits from Apple Watch and iPhone investment cycles.
Baruah also pointed to spikes from several upcoming products, including not just the "iPhone 6s" — which should be announced Sept. 9 — but also a 12.9-inch iPad, and ultimately an iPhone 7 in 2016. The analyst speculated that the latter could have features such as a wraparound screen and "no touch" gesture commands via Apple's acquired PrimeSense technology.
Another suggestion was that Apple could reinvigorate the iPhone lineup with a new, smaller form factor in the middle of 2016. The view echoes some recent rumors that Apple is working on an "iPhone 6c" with the specifications of the iPhone 6, but a 4-inch screen like the iPhone 5s. Such a device could be revealed on Sept. 9, but recent reports have hinted that the product will be delayed if it launches at all.
Baruah is calling for a $170 price target for Apple stock. Shares have taken a beating in recent weeks, falling from $132 in July to $114 in early Monday trading. In August much of this was linked to economic problems in China, though deliberate comments by Apple CEO Tim Cook have helped prices bounce back.
Malcolm Owen
Amber Neely
Christine McKee
Chip Loder
Marko Zivkovic
34 Comments
[quote name="sog35" url="/t/187946/apple-stock-should-return-to-130-by-end-of-2015-says-brean-capital/0_100#post_2768331"]LOL. It will be $130 by end of October $150 by EOY [/quote] Haha! No chance at all. It will not be $150
seriously. will be 130 by end of september. but you know. doom! doom! doom!
The cynic in me says that the Anal(ists) have got tired with shorting the stock and now want to 'big' it up.
What goes up, must come down.
I predict a whole raft of downgrades after the announcements next week.
I don't directly own any Apple stock but sometimes these soothsayers need to get well and truly shafted financially.
These time-bound price forecasts (including the various posts and counter-posts above) are laughable.
There's nothing in known economics to enable someone to be able to confidently say 'what' and 'when' at the same time with such specificity. Period.
It's weird how people conflate luck and skill all the time.
[quote name="sog35" url="/t/187946/apple-stock-should-return-to-130-by-end-of-2015-says-brean-capital#post_2768366"] If there was a time for downgrades it would have been the last 2 weeks based on China weakness. No one is expecting some blowout announcement next week. The next possible event that could cause a downgrade is late October with earnings. If Apple guides to negative revenue growth we could see some downgrades. [/quote]$130 here we come....if Apple event is overwhelming with ATV and...wishful Apple car. I don't care if iPhone 6S