Why Apple, Inc. Shares Could Pop Another 20%

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Apple (NASDAQ: AAPL  ) rallied about 3% Wednesday after Canaccord Genuity reiterated its Buy rating on the consumer electronics gorilla.

So what: Along with the bullish call, analyst Michael Walkley planted a price target of $112 on the stock, representing about 18% worth of upside to Tuesday's close. So while contrarian traders might be attracted to Apple's price strength over the past year, Walkley's call could reflect a sense on Wall Street that its growth prospects still aren't fully baked into the valuation.

Now what: According to Canaccord, Apple's risk/reward trade-off remains rather attractive at this point. "With our recent surveys indicating growing consumer awareness and channel willingness to pay more for new larger-screen iPhones, we still anticipate a very strong iPhone 6 upgrade cycle," said Walkley. "Further, we believe Apple will charge a premium for these larger-screen iPhones resulting in stable gross margin trends for overall Apple but with a higher gross margin dollar contribution due to an increasing revenue mix from higher ASP iPhones." When you couple that upbeat outlook with Apple's still-reasonable forward P/E in the low-teens, it's tough to disagree with Canaccord's bullishness.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 23, 2014, at 12:32 PM, pondee619 wrote:

    "Shares of Apple (NASDAQ: AAPL ) rallied about 3% Wednesday after Canaccord Genuity reiterated its Buy rating on the consumer electronics gorilla."

    Are you stating that there is a causal relationship or merely a coincidental one?

  • Report this Comment On July 23, 2014, at 12:40 PM, zippero wrote:

    While Samsung's stock continues falling in S. Korea, Apple's continues to rise. The market has begun to realize that Samsung and all Android phone makers are just profitless commodities selling the same exact Android OS as each other with neverending, relentless price wars among themselves for scraps and 0.2% profit margins despite 80% market share. Apple focuses on quality and charging appropriately and with its profits invests further in its business and pulls ahead from the profitless, commoditized Android pack everday.

  • Report this Comment On July 23, 2014, at 1:02 PM, 650nm wrote:

    Each phone type has its drawbacks and benefits, not so much a duel between hardware vendors as it is between platform types. This list is a small summary of niggles with each:

    •Default apps:

    Android. You can choose what app to be a default app. iPhone makes you launch safari on links even if you have other browsers installed.

    •Direct access to storage

    You can't use the iPhone as a USB drive.

    •email attachments

    iphone can't attach files except what's in your photos. Android can send email with attachments from other cloud storage providers.

    •charger

    Lightning plug is awesomely convenient, but microUSB is becoming all but universal

    •backups

    iOS seems smoother, more stable, fewer glitches.

    Backups and restores are brainless (however you can't do selective restore). All saved games, profiles & history for apps transfers over to new phone.

    Android is selective, but depends on apps and is very manual

    •photos

    Faster on iPhone. Better quality on android, depending on phone.

    •virtual assistant

    Google Now is better with searches, has very convenient predictive search cards.

    Siri voice command work better.

    Location reminders with Siri is better

    •un/lock

    Fingerprint reader works well on iphone. Android is a totally mixed bag

    •extra apps

    iPhone can't hide anything except to stash in junk folder. Android home is totally customizable and has widgets. No bloatware on iPhones. Android depends on provider and some require root to remove.

    •Bluetooth

    Can be very troublesome with Android, depending on build and vendor, but can work with a lot of obscure and legacy hardware. iPhone works with anything that is made to work with iPhone, period.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3040881, ~/Articles/ArticleHandler.aspx, 10/31/2014 6:50:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement