Roger Fingas
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.
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14 Comments
Is this the same firm that had to change its name from Brean Murray Carret & Co. because of securities fraud?
I'm very optimistic, but even I am not anticipating above $140 by the end of the year.
[quote name="sog35" url="/t/185999/brean-capital-kicks-off-coverage-of-apple-stock-with-160-price-target#post_2716262"] Then you are not optimistic at all. Stock is at $133 and $140 is only 5% away. [/quote] I am optimistic. I am also anticipating a market correction soon. How big? I cannot say.
[quote name="sog35" url="/t/185999/brean-capital-kicks-off-coverage-of-apple-stock-with-160-price-target#post_2716269"] Then you are not optimistic. 5% is not worth the risk of holding a stock. Better off going to an index fund [/quote] 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.
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.