Needham: Apple an ‘arms dealer’ to ‘the wealthiest’ consumers; ‘Strong Buy’ recommendation

“Shares of Apple (AAPL) are up 69 cents, or 0.6%, at $110.49, in pre-market trading, after Needham & Co.’s Laura Martin this morning initiated coverage of the stock with a Strong Buy recommendation, in a sense taking over for the late, great Charlie Wolf, who passed away in 2014 after many years covering the stock,” Tiernan Ray reports for Barron’s. “Martin assigns a $150 price target.”

Ray reports. “Martin deems Apple an ‘arms dealer’ to ‘the wealthiest’ consumers in a world where consumers are ‘creating a new global distribution network over connected mobile devices.'”

Part of AAPL’s valuation discount is because Apple is valued as if each of its device launches is a stand-alone product, with no credit for lower risk or predictable track record owing to its previously established fan base. We respectfully disagree. We think Apple is more like Harry Potter than Pixar. Our analysis follows… In an industry where hits are hard to create, and investments often top $100MM per film, Pixar does it the hardest way possible, launching new titles most of the time… [for Harry Potter] The upside remained intact while the risk of making sequels in a single franchise was far lower (as evidenced by minimal volatility compared to Pixar) because consumers had an affinity for the brand before each sequel was released. This is true of Apple device releases as well. There is much familiarity and anticipation that lowers risk and implies consistent demand for any device Apple releases. — Laura Martin, Needham & Co.

Read more in the full article here.

MacDailyNews Take: Exactly. Plus, Apple can also be like Pixar, launching all-new blockbusters as technology advances and allows (Apple II, Mac, OS X, iPod, iTunes, iPhone, iPad, Apple Watch, etc.).

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12 Comments

    1. I can’t tell exactly what the ‘arms dealer’ crap is supposed to mean or accomplish. I find it highly disturbing. If it is a sarcastic jab at the FBI’s abuse of Apple and We The People, that’s fine with me. But there is no context for the ludicrous comment provided. Further ranting below…

    1. That most analysts are idiots has been established consistently for years. No further proof required. All we do now is watch them demonstrated their idiocy day after day after day. I swear they’re all hallucinatory drug addicts, hit whores and intellectually lazy.

  1. The truth is that 110.00 is the new 134.00 for AAPL. It seems nothing Apple Inc can do will move their equity back to last year’s high: not share buybacks, not new products, not improved products, not products in development–nothing. The coming dividend increase seems to mean little to investors as well. Sadly, VERY SADLY, the AAPL equity is now MSFT . . . without the relative stability. As I advise every friend/investor I know, stay away from AAPL, but buy the hell out of their products. You can’t go wrong.

    1. It’s unlikely the share price is going to move up very much as long as there are continued buybacks in place. It’s better for Apple and shareholders if the share price remains relatively low. Don’t buy for the share gains. Buy for the dividends. Whenever I see target prices of $150 it just seems impossible for the current Apple.

      Apple isn’t like Tesla. Musk is carrying Tesla by himself.

  2. A massive WTF?! moment:

    Martin deems Apple an “arms dealer” to “the wealthiest” consumers in a world where consumers are “creating a new global distribution network over connected mobile devices.”

    I can’t imagine a sane justification for that ludicrous comment. I’d like to read it in context, but there is none provided in the article.

    To me, this comes off as raw propaganda, attempting to equate the Fourth Amendment to the US Constitution with the promotion of war, death and mayhem. Again: WTF?! I am profoundly disturbed by Martin’s ludicrous statement. You just KNOW some loon is going to take this bullshit seriously and use it to attack privacy rights in order to shove us all into the ‘Nineteen Eighty-Four’ scenario. That’s sick.

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