Credit Suisse analyst Shannon Cross on Wednesday raised the firm’s rating on Apple to “Outperform” (buy) from “Neutral,” offering four reasons for the upgrade.
1. A lot of people use Apple devices. Cross noted that more than 1.8 billion iPhones, computers, and the like are in circulation, which helps spur uptake of the company’s services and software, while also keeping them around as customers.
2. Apple’s services business will help its profit margins… The company’s services segment generates a gross margin of more than 65%.
3. Overall margins aren’t too shabby either — and should continue growing. “We estimate gross margin will continue to trend around 43%, with inflation and currency headwinds offset by higher Services revenue (growing double digits) and vertical integration of components,” Cross said.
4. Apple has a ton of cash. Apple is sitting on about $192 billion in cash, which should allow it to do whatever it needs to do to drive returns.
MacDailyNews Take: B-I-N-G-O on all four cards. Cross has set a target price on Apple of $201, which would take the company back above the $3 trillion valuation mark it first hit back in January.
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This is the same Credit Suisse that has been / still is, in scandal after scandal. Oh yeah, let’s heed to their outstanding wealth knowledge. A bank that manages many of the wealthy and corrupt in the world. As recent as 2019 with scandals also including the in-fighting between the then CEO Tidjane Thiam and Iqbal Khan (who ran the bank’s wealth management division). What about the Greensill supply chain funds alleged fraud in the spring of 2021? This was just insurance policies. Or what about Archegos leverage scandal (Total Return Swaps) also in 2021? CEO after CEO over the last 3 years that are aloof, self-serving, entitled and involved in scandals. Or how about the scandal going back to Tidjane Thiams time. How about the ‘Tuna Bonds’? With around $11B withdrawn / disappearing. Or the alleged financing a cocaine smuggling ring? Or what about the data leaks? The ’Swiss Leaks’…. talking about offering a sanctuary to dirty money flowing around the world from family members of kleptocrats and oligarchs, corrupt government officials and criminal organizations. Which involved human trafficking and embezzlement. With many of the accounts closed now but a percentage still open even in 2022. There are many, many more absurd and ridiculous goings on at Credit Suisse. Yeah / No… let’s NOT value / trust their voice. Will Apple do well? I feel it will. More so than other firms even in a crisis, if that comes. Credit Suisse is an abomination and should not be mentioned here giving them credibility.
I don’t know – nor do I have reason to care – if your criticisms of Credit Suisse are valid.
Despite whatever their sins may be, however, there are two facts you can’t dispute:
1) They are an internationally-known financial house, and are mostly respected by professionals in that industry; and
2) Their take on Apple is spot-on.
Mention of them by MDN gives them no additional credibility, but their evaluation of Apple shows that, whatever else they may have gotten wrong, at least they’re correct on this one.
Thanks for the feedback Mark. I welcome it. I have been waiting for someone to comment. Apple is solid as you mention. I agree, but not because of who or what Credit Suisse are. I have done my homework on them. There is so, so much more around Credit Suisse that I didn’t mention because my comment was long. Do your homework everyone. That is what I am saying. Just because a bank in Switzerland says so is not a good reason (especially this one). A bank who has a questionable past and more recent questionable past.
-R