FBR Capital expects a number of updates to be unveiled at the iPhone launch event in September
On Thursday, Apple Inc. (NASDAQ:AAPL) formally sent invitations for its iPhone 6s launch event to be held in San Francisco on September 9. FBR Capital provided its take on what it expects the tech giant to unveil at the event.
Analyst Daniel Ives anticipates that the management will unveil a slew of new products and features including the iPhone 6s and 6s Plus, 12.9-inch iPad Pro and an updated Apple TV. He thinks that investors will be focusing on the new features in iPhone 6s, such as Force Touch, Aluminium chassis, A9 system on chip and 12MP camera.
The analyst was positive that CEO Tim Cook and his team would reveal upgrades in the new iPhone not seen in the past s-models. He points out that the stakes are high this time and that the tech giant must deliver to turn around the current negative sentiment and convince investors about its future growth strategy.
Mr. Ives outlined a number of factors to answer the question of why Apple shares are poised to go up. He points out that less than 30% of the iPhone installed base has upgraded to iPhone 6 and 6 Plus to date and that the start of the new product cycle reflects the presence of a huge growth opportunity. The analyst added that the Chinese smartphone market represented a $100 billion opportunity over the next three years and Apple was trading at a low multiple of 9x (excluding cash).
FBR Capital reiterated an Outperform rating with a $175 price target on Apple stock.
Alongwith FBR Capital, Piper Jaffray also weighed in on Apple in light of the latest development. Analyst Gene Munster expects Apple to unveil Force Touch-equipped iPhone 6s and an updated Apple TV with Siri. He thinks that Apple’s wild card is the offering of a content TV streaming service. “We believe the hold-up on a streaming offering is around the availability of enough content to make an offer that Apple deems as compelling,” added Mr. Munster. Piper Jaffray has an Overweight rating with a $172 price target on the stock.
Before the launch of the Apple Watch, sell-side analysts were overwhelmingly optimistic about the device’s performance and deemed that it would open up a new horizon of opportunities for Apple. However, the tech giant’s muted stance on Watch sales coupled with some negative reviews suggests that smart wearable has not lived up to expectations. Similarly, the upcoming iPhone 6s might not make a huge difference as it gets tougher for Apple to provide innovation and creativity in the design and software of the smartphone.
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