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Wedbush Raises Apple's Price Target Ahead Of 'Pivotal' March 25 Event

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Wedbush Raises Apple's Price Target Ahead Of 'Pivotal' March 25 Event

Wedbush's bullish case for Apple Inc. (NASDAQ: AAPL) is getting stronger ahead of the March 25 presentation, which is likely to mark a "pivotal step" for the company.

The Analyst

Wedbush's Daniel Ives maintains an Outperform rating on Apple with a price target lifted from $200 to $215.

The Thesis

Apple is expected to detail how it plans to enter the "content arms race" to help support its services business, Ives said in a research report. Management is likely to include content partners and the company will maintain a 25-35 percent fee of cut of monthly subscriber fees. Apple's original content remains in production with high-profile Hollywood superstars, including Oprah Winfrey, Steven Spielberg, Jennifer Aniston and Reese Witherspoon.

Monday's announcement will likely prove to be the "tip of the iceberg" for a much larger streaming content strategy, Ives said. This may prove to be a large catalyst to Apple's services growth business, which remains a "wild card" in driving the stock's valuation. In fact, Apple's new business could generate revenue of more than $50 billion by fiscal 2020 even though it's years behind in the "content arms race."

Apple's strategy of avoiding large scale M&A deals is widely known but this could change in the streaming video space. The process of creating a large library of original content is a "slow and arduous path," according to Ives, but being aggressive in acquiring content makers creates a realistic goal of hitting 100 million subscribers within three to five years.

Price Action

Shares of Apple were trading higher around $187 Thursday morning.

Related Links:

Apple's Streaming Ambition Could Result In Disney CEO Iger Resigning From iPhone Maker's Board

Netflix CEO Says Company Decided 'Not To Integrate ' With Apple

Latest Ratings for AAPL

DateFirmActionFromTo
Apr 2019Initiates Coverage OnNeutral
Apr 2019ReiteratesBuyBuy
Apr 2019DowngradesHoldReduce

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Apple Services Apple Streaming Video Daniel Ives streaming video WedbushAnalyst Color Price Target Analyst Ratings Best of Benzinga

 

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