Apple (AAPL) PT Raised to $150 at Credit Suisse; Stock Added to U.S. Focus List
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Rating Summary:
39 Buy, 25 Hold, 7 Sell
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
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Credit Suisse analyst Kulbinder Garcha raised his price target on Outperform-rated Apple (NASDAQ: AAPL) to $150.00 (from $140.00) and the stock was added to the firm's U.S Focus List.
Garcha said the market may be "underestimating the GP contribution from Services, but more important, underappreciates its growth potential and the annuity-type business it drives in terms of retention and replacement across the business."
The analyst estimates that the GP from Services has grown from $3.2bn in 2010 to $14.5bn (15% of the group) today.
Their services revenue build up analysis concludes the GP could grow to $33.7bn or 29% of GP by 2020, driven by three key factors. "First, we note an installed base of over 1bn active devices, and almost 600mn unique users that are highly affluent and "transacting" (accounting for 66% of mobile commerce, spending 7x more than Android users). Second, we see a Services spend per user accelerating to $113 in 5 years from $61 today, as uptake of service offerings including scale from Apple Pay, Apple Music and iCloud, takes hold and download revenues stabilize. Third, we see new service opportunities in the TV/Video market. "
The firm said given growth in Services and adoption of installment plans, they see ~55% of GP could be directly annuity-based.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $109.99 yesterday.
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