Brean Hikes Apple Target To $170, Says Consensus Is Too Low Through 2017

In a report published Tuesday, Brean Capital analyst Ananda Baruah maintained his Buy rating on Apple Inc. AAPL, while raising the price target from $160 to $170. With the company posting robust March quarter results, the analyst believes that the Street expectations for 2017 appear significantly low. Apple posted strong March quarter results, significantly higher than the consensus, across the board. Both EPS and revenues came in higher than Street expectations. The company also shipped 61.2 million units more than expected during the quarter. The analyst expects Apple to post significant EPS upside in 2017, driven by its iPhone shipments through the year, favorable gross margins and opex leverage through 2016, when the company will reap the benefits of its investments in iPhone 6 and iWatch. Related Link: Apple Earnings Live Blog: Q2 Conference Call The company has also announced a 50 percent increase, to $200 billion, in its capital return program through March 2017. "AAPL should continue to return material capital over the next few years (25% of Cap) that can both catalyze and provide a floor under the stock," analyst Baruah said. According to Brean Capital, "Opex $ leverage potential remains tremendously unappreciated." Shares were up more than 2 percent at $135.90 in Tuesday's pre-market session.