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Apple Price Target Multiple Increased At BTIG; Firm Touts iPad Growth

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Apple Price Target Multiple Increased At BTIG; Firm Touts iPad Growth
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Apple Inc. (NASDAQ: AAPL) reported its FQ3 results at a slight beat to expectations.

BTIG’s Walter Piecyk raised the price target on the company from $115 to $124.

“Valuation multiples are a function of growth and risk, and with FQ3 behind us and reasonable guidance for the current quarter, we believe investors can now focus on what new products and services can return Apple to growth,” Piecyk mentioned.

iPad Upside

A key source of the revenue upside for FQ3 was the iPad, where ASPs increased 18 percent, with Apple being able to grow its iPad revenue for the first time in 10 quarters.

iPad Pro played an important part in this increase, although the $900 million upside was offset by iPhone revenue, which missed the estimate due to ASP, which declined 9.8 percent.

Related Link: Brean Sees More Support For Apple Than Anticipated, Thanks To ASP Reversion

According to the BTIG report, “Apple CFO Luca Maestri cited the impact of an inventory reduction of over 4 million high end phones and a high mix of iPhone SE sales as the driver to the erosion.”

Guidance

Maestri expects the ASP to rise in FQ4, although the company did not provide details regarding the size of this increase.

“If we leave our 45 million iPhone unit estimate unchanged and forecast a $15 sequential increase in ASP to $610, it results in a total company revenue estimate of $46.5 billion, which is in the middle of guidance,” Piecyk stated.

The analyst expects Apple to return to growth in F1Q17.

At time of writing, Apple was up 7.09 percent in Wednesday's pre-market session, trading at $103.52.

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Latest Ratings for AAPL

DateFirmActionFromTo
Aug 2017NomuraMaintainsBuy
Aug 2017BarclaysMaintainsEqual-Weight
Aug 2017Deutsche BankMaintainsHold

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