“In a report out earlier, Citi analyst Jim Suva reiterated a Buy rating and $145 price target on Apple and added the stock to the Citi Focus List,” StreetInsider reports. “Suva said the consensus is underestimating both the continued demand for iPhone 6 and iPhone 6 Plus as well as the demand for the higher memory density phones. He also expect Apple to announce an increase in its share buyback program to $120 billion (from $90 billion currently) to be used year end 2016, as well as a 10%+ dividend increase.”
Suva said while worries remains (i.e. Apple Pay has only been rolled out in the United States, FX, and declining iPad sales), he listed 5 reasons Apple stock can trade higher from here:
• Device Acceleration
• Consensus Estimates Should Go Higher; Attractive Valuation
• Gross Margins Permanent Step Up Higher
• Apple Pay Plus Passbook
• Enterprise Opportunity
• Apple Watch
Much more in the full article here.
MacDailyNews Take: Suva certainly is correct that investors do not fully grasp this change in behavior by the wireless carriers (making it easier for consumers to upgrade their iPhone to the newest iPhone rather than waiting 2+ years for an upgrade) and the positive impact to Apple.
One item not explicitly mentioned by Suva that is another important propellent for Apple is ecosystem stickiness for consumers. It becomes increasingly difficult to even imagine leaving the Apple ecosystem with each Apple device one uses. Handoff, iWork for iCloud, Continuity, etc. etc. etc. all just work, together, to deliver an experience that is already leaps and bounds beyond what other platforms/device makers can offer. Even worse for overmatched rivals, Apple is rapidly accelerating even further ahead.
People who own a Mac, and iPad and an iPhone understand this tremendous advantage. No other personal computer, smartphone, and tablet maker can even hope to offer years from now anything even remotely resembling what Apple already offers today.
Plus, in a little over two months, we’ll have WWDC 2015 and another round of unmatchable integration and unrivaled seamlessness that will have would-be competitors throwing up their hands in despair.