Market Overview

5 Reasons To Own Apple Heading Into 2016

5 Reasons To Own Apple Heading Into 2016
  • Apple Inc. (NASDAQ: AAPL) shares are down 5 percent in the last six months, amid significant volatility.
  • FBR & Co’s Daniel H. Ives maintained an Outperform rating on the company, with a price target of $175.
  • Ives mentioned five predictions that could propel Apple's growth story in 2016 and “carve out a new chapter for Cook as he looks to transform/expand this golden consumer brand.”

Analyst Daniel Ives believes that Apple continues to be “a battleground stock,” with bears remaining worried about tough iPhone 6 comps and iPhone 6s growth prospects, negative indications by the supply chain, worries related to China, and challenges for Apple Watch sales.

Ives added that many analysts may not be “seeing the forest through the trees on the story heading into 2016.” He added that Cook and Cupertino seem to be “entering a major inflection point period for Apple,” with several growth drivers that should fuel a healthy FY16 and “lay the seeds of growth for a “blockbuster” iPhone 7 product cycle for FY17.”

Related Link: Positives And Negatives Apple Investors Must Know, According To UBS

Ives enumerated five key predictions for Apple that would likely fuel Apple's growth story in 2016:

  1. iPhone sales could beat Street’s initial estimates for FY16, backed by robust 6s sales with a boost from legacy 6 upgrades
  2. Streaming TV to be announced in 1H16, which could open up “a major "game-changing" opportunity for Apple to penetrate the consumer living room”
  3. China will be a $100 billion market opportunity for Apple on the iPhone front, “remain white hot despite macro fears,” and comprise the company’s biggest geographic region by late 2017
  4. iPad Pro sales will help reverse the negative tablet trend witnessed over the last year, with success in the enterprise market, and represent 15 percent of Apple's revenues, up from the current ~10 percent
  5. Apple's electric car endeavor, code-named Project Titan, will “gain steam by continuing to hire cutting-edge auto industry experts and dedicating significant R&D and potential technology acquisitions in the next-generation auto arena down the road.” This could make this initiative a 60-70 percent possibility by 2020.

“The wild card remains a potential $75 billion to $100 billion increased buyback, which could be on the horizon, in our opinion, during the course of 2016 given the mounting pile of cash in the coffer,” the FBR & Co report stated.

Latest Ratings for AAPL

Jan 2021BarclaysMaintainsEqual-Weight
Jan 2021Canaccord GenuityMaintainsBuy
Jan 2021Credit SuisseMaintainsNeutral

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