Citigroup Analyst Elaborates On 5 Reasons To Buy Apple

Citigroup hardware analyst Jim Suva recently released a note in which he mentioned five reasons that will take Apple Inc. AAPL higher: device acceleration, attractive valuation, increase in gross margins, enterprise opportunity and Apple Pay and Passbook.

Suva was on CNBC Wednesday to explain what makes him so bullish on Apple.

#1 Reason To Buy Apple

“Believe it or not, it’s innovation,” Suva replied. “The company has to continue to innovate. So far, it’s mostly been on the consumer side; we’ve laid out our five reasons that actually takes it into the enterprise side: Apple Pay, Apple Watch and even potentially someday Apple Car.”

Apple Car?

Suva explained, “Going into the car, in the auto sector. Their available market is broadening; we see five reasons stock can keep going higher.”

With So Much Potential, Does The PT Make Sense?

When asked about the "low" price target of $135, Suva replied, “That’s pretty harsh, but let’s be honest. The last time I was on the show people were calling me nuts for having too high of a target price.

“Now we roll forward the clock today; it’s a great problem to have that we are sitting at. We are assessing true demand. iPhone 6 products continue to sell well, and importantly the gross margin and the higher gigabyte memory content is higher and higher. That’s a permanent set higher.”

Related Link: Why Pacific Crest Remains Negative On Apple

Looking Forward

He continued, “As long as earnings keep going higher and this company continues to gain share and go in to other markets and earnings keep going higher, the stock is going to go higher.”