Apple's Longer-Term Earnings Power Could Track Near 10% Or Better

Is Apple's earnings growth profile cooling down? According to Mark Moskowitz of Barclays, the answer is a resounding ‘no' and the company's long-term earnings power can track near 10 percent – if not better. As such, the analyst named Apple as his top pick within the US IT Hardware space while maintaining an Overweight rating and $155 price target on the stock. Moskowitz offered three reasons to justify his growth estimates: 1) Apple's ultra-loyal customer base, 2) the recently announced iPhone financing program, and 3) the under-appreciated iPad Pro.

According to Moskowitz, Apple's ecosystem has created a "stickiness" or "bond" with its loyal consumer base that is "difficult to break." The analyst suggested that this "stickiness" will drive above-trend revenue growth in the near-to mid-term. In fact, the company's current reputation is strategic to "whatever is next" – wearables, smart cars, home robots, etc.

Moskowitz continued that Apple's iPhone financing program allows consumers the opportunity to upgrade their iPhone device each year. The analyst noted that various carriers have implemented similar programs and reflects their "willingness to share the absorption" of each iPhone device. This merely proves the "resilient pricing power" as "mechanisms to boost revenue growth" eve in the face of difficult year over year compares.

Finally, Moskowitz suggested that Apple's new iPad Pro could serve as a "Trojan Horse" and accelerate the company's expansion into the enterprise market. The analyst added that when key decision makers within organizations evaluate the suitability of the new iPad Pro, Apple could also pitch its other products and services, including enterprise-based applications and a cloud-based platform – both of which are parts of Apple's enterprise offering that are currently "underappreciated."