Pacific Crest Securities where the company’s stock has been given an Overweight rating considering the sector weight.
Apple Inc. the tech giant has been upgraded by the Pacific Crest Securities where the company’s stock has been given an Overweight rating considering the sector weight. At this point, the 12 month target price is kept at $142. Considering the current price levels, the company’s target price signifies an upside potential. The tech behemoth has been successful in beating the estimates made by analysts in terms of Earnings per Share (EPS) and revenues during the fourth quarter as portrayed in the earnings report.
As per the report, the company was successful in selling 48 million units of the Apple iPhone in the fourth quarter which relates to the consensus estimates. The revenues for the company accumulated to $51.5 billion which is relatively ahead of the estimations made by Street which said $51.3 billion. Moreover, on a year over year basis there has been 23% growth. The analysts at Pacific Crest claim that the average selling price which was better than expectations for the iPhone has actually compensated for the staggering selling price of Mac.
According to the analytical firm, the brand equity of AAPL along with the substantial share of the company in the Smartphone industry is actually good enough to give it a strong position in the market in terms of pricing. This will actually assist the company in enjoying healthy margins while maintaining the constant “topline growth”.
As per Pacific Crest Securities, since early July, the price to earnings ratio for Apple (P/E) has actually flattened by almost 12% and almost 20% on a year to date (YTD) basis. This has actually given birth to concerns by the investors since the adoption rate for the company’s Apple Iphone 6s has been extremely sluggish. This has already been considered while drafting the stock price. The firm at this point expects that the March quarter might pose some vulnerability but the EPS and Revenues will further accelerate once the Iphone7 cycle starts.
Considering the company’s strong guidance for the first trimestral., the estimates have now been revised up by Pacific Crest for the sales of Iphone that is now 75.9 million units from 66.9 million for the quarter that ends in December. They have also given the EPS estimate for the complete year to be $10.30 for the fiscal year of 2017 that shows almost 9% growth with the iPhone 7 cycle.
Thus considering the prospects Apple stock have been upgraded to an Overweight rating.