Samsung's 'Tough' Outlook Will Have Neutral Impact on Apple

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  • Apple Inc. AAPL shares have declined 11.49 percent over the past one month, falling to a low of $102.67 on January 4.
  • J. P. Morgan’s Rod Hall has maintained an Overweight rating on the company, with a price target of $145.
  • Although Samsung warned of a tough 2016, along with concerns regarding the Q4 outlook, Hall believes that this would have a neutral impact on Apple.

According to the J. P. Morgan report, “Samsung Electronics said it expects a difficult business environment in 2016 due to weak global economic conditions and heightened competition in key businesses including memory chips and smartphones.”

Samsung’s CEO, Kwon Oh-hyun, released a statement on January 4, telling employees, in a New Year’s address, that global growth was expected to remain low through 2016, with higher uncertainty driven by various issues, including financial risks from emerging countries.

Analyst Rod Hall believes that this underscores J. P. Morgan’s caution stance on 2016. Hall also mentioned that he preferred telecom networking as a subsector, although there could be value opportunities with the more consumer exposed stocks.

Meanwhile, Apple has raised prices for the iPhone and iPad in Germany “to account for a new copyright levy agreement inked by tech industry importers and creative professionals in December,” Hall stated.

Apple and other tech companies had agreed in December to pay €5 to €7 per smartphone and tablet “in a deal designed to benefit musicians, producers and other content producers,” The report added.

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Posted In: Analyst ColorLong IdeasReiterationAnalyst RatingsTrading IdeasJ.P. MorganRod Hall
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