Rob Cihra, formerly of Evercore ISI, after taking up a new post at Sterne Agee CRT, today initiates coverage, including Buy ratings on Apple (AAPL) and Neutral ratings on BlackBerry (BBRY), Fitbit (FIT), and Garmin (GRMN), among others.
Tiernan Ray reports for Barron’s, “For Apple, upon which he bestows a $150 target, he advises investors not to shy away because of ‘tough comps’ for the iPhone: ‘We estimate iPhones accounting for 66% and 72% of Apple’s revenue and gross profit in FY15, clearly its most critical product. With Apple’s installed base starved for larger screens, last year’s iPhone 6 has driven a massive upgrade cycle that re-accelerated unit growth +36%Y/Y over the past 4 qtrs. That’s unsustainable and now makes for tough comps starting in this Dec-qtr, when we estimate iPhones up just +3%Y/Y to 77mil (albeit better than market fears of down Y/Y). But we estimate still less than 50% of the iPhone installed base will have upgraded to larger than 4-inch screens exiting CY15, leaving more runway for iPhones to still grow +5%Y/Y in FY16 even off tough comps, boosted by the 6s and $100 price-cut on last year’s models.'”
“For FitBit, which he also assigns a $45 target,” Ray reports, “the stock looks too rich given it hasn’t yet won the war in wearables.”
Read more in the full article here.
MacDailyNews Take: “Hasn’t yet,” as in “will never.”