Market Overview

Here's Why Apple Is Drexel's Top IT Pick For 2018

Here's Why Apple Is Drexel's Top IT Pick For 2018

Drexel Hamilton has named Apple Inc. (NASDAQ: AAPL) as its top pick in the IT hardware and software sector in 2018.

The Analyst

Drexel Hamilton analyst Brian White has a Buy rating on Apple with a $235 price target.

The Thesis

Despite 2017's strong performance and concerns surrounding iPhone order cuts, Apple is on track to gallop past the $1 trillion market cap mark in 2018 thanks to a host of catalysts, White said in a Tuesday note. (See the analyst's track record here.) 

Apple can hit the $1-trillion mark through further progress in revaluation; heightened capital distribution opportunities after tax cuts in the U.S.; new innovations; a return to annual sales growth in Greater China; and further progress in the ultra-luxury smartphone market, White said. 

Apple's journey into the ultra-luxury market through the launch of the iPhone X creates a durable cycle, and White said he expects "more innovations" from Apple in 2018. 

"We believe the iPhone X (and this year's new iPhone innovations) will drive an upward trajectory in ASPs and opens up the opportunity for gross margin surprises over the next 12-24 months." 

Drexel Hamilton also views Face ID as a major innovation that could be extended across Apple's product line in 2018.

The firm projects iPhone unit growth to accelerate from 2 percent in 2017 to 15 percent in 2018.

The Apple ecosystem is expected to be further enhanced in 2018 with HomePod and positive Apple Watch momentum, White said. HomePod, which the analyst expects to be available early this year, will become popular in 2018 and further enhance Apple's expansive digital matrix, he said. 

Drexel Hamilton projects that Apple will positively surprise its investors with its capital distribution initiative in 2018, given the recent tax legislation signed by President Donald Trump. Apple already used about $234 billion of the $300 billion it targeted to return to shareholders by March 2019, White said. 

The Price Action

Apple shares gained 46.11 percent in 2017.

At the time of writing, the shares were up 1.23 percent at $171.31.

Related Links:

Survey: Santa Is Bringing Strong Apple iPhone X Holiday Sales

Benzinga's Bulls & Bears: Apple, GE, Starbucks, Tesla, And More

Photo courtesy of Apple. 

Latest Ratings for AAPL

Jan 2020MaintainsBuy
Jan 2020MaintainsNeutral
Jan 2020MaintainsOverweight

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Apple Brian White Drexel Hamilton iPhoneAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (AAPL)

View Comments and Join the Discussion!

Latest Ratings

MCDWells FargoMaintains234.0
DNKNWells FargoMaintains72.0
SNAPB of A SecuritiesReiterates22.0
DPZWells FargoMaintains294.0
CBRLWells FargoMaintains159.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at