“Many analysts are cheering Apple’s latest quarterly report, with Pacific Crest’s team upgrading their rating for the iPhone maker’s stock to overweight, and BTIG arguing the stock is cheap,” Victor Reklaitis reports for MarketWatch.
“In the wake of the earnings report, Pacific Crest analysts say Apple’s ‘dominant smartphone position’ and its ‘attractive valuation’ have prompted them to raise their rating for the stock to overweight from sector weight,” Reklaitis reports. “‘The smartphone is the most important consumer product ever, in our view,’ said Pacific Crest’s Andy Hargreaves and Evan Wingren in a note late Tuesday.”
“An analyst at BTIG highlights the fact that Apple is a cash-generating machine,” Reklaitis reports. “‘Apple is converting 30% of its revenue into free cash flow, generating $70 billion of free cash flow annually,” said Walter Piecyk in a note late Tuesday. “This implies an 11% FCF yield relative to its $650 billion market cap. That is simply too high of a yield given its market position, expectation of growth and high margins, regardless of the much lower level of revenue growth and EPS expectations for 2016… Even with no growth in EPS, we believe Apple’s valuation is too low based on cash generation.'”
Read more in the full article here.
MacDailyNews Take: The company keeps on doing what it’s doing, setting records, and the only stories that change are those from the so-called analysts. Time to allow the AAPL buoy to bob up now? The time to pile on in order to once again submerge AAPL under the weight of invented “concerns” looms as usual.
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