Jefferies Maintains Apple At Hold, Says 'iPad Is Changing'

In a report published Monday, analysts at Jefferies maintained their Hold rating on
Apple, Inc.
. The price target has been raised from $130 to $135. The analysts believe that the company is making positive changes to iPad for Enterprise, with more changes expected this year. However, the analysts also believe that advances in the Android (Samsung KNOX) and Windows (Surface 3) could lead to intensifying competition in the Enterprise client devices segment. "We like the Apple Watch. iPad is Changing For Enterprise. We think a combination of IBM MobileFirst for iOS, iOS extensions, and availability of Microsoft Office for iOS are increasing the relevance of iPad for broader Enterprise applications, even though iOS continues to limit file system access," the analysts said. The analysts believe that Surface 3 offers a very capable and affordable device that could be difficult for iPad to beat in the near term. Apple is expected to arm the iPad with a larger display, integrated stylus and USB3.0, similar to its competitors, possibly starting in 2H15. Jefferies believes that "consumers and investors are probably under-appreciating the fact that mobile payments through Apple Pay would be more secure than payments made using physical credit cards. The security/privacy benefit could drive higher penetration of both mobile payments and Smartwatches globally." The analysts expect Apple to report strong FQ2 revenue, EPS and gross margins, driven by iPhone shipments to China.

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