Holiday Seen as Inflection Point for Apple Watch (AAPL) - Analyst

Drexel Hamilton analyst Brian White sees Black Friday as a catalyst for Apple Watch and says the Apple (NASDAQ: AAPL) lineup will be tough to beat this season.

White notes that as of last night, the IBM Watson Trend App listed the Apple Watch as holding the top Trend Score at 100. He reiterated his view that Apple Watch will be a big hit this holiday season. "We believe this holiday could be the inflection point for the Apple Watch, driving an acceleration in the adoption rates in 2016 and beyond."

White highlighted the following:

• The National Retail Federation's (NRF) Preliminary Thanksgiving Weekend Survey projects 135.8 million shoppers (58.7%) "definitely will or may shop on Thanksgiving, Black Friday, Small Business Saturday and/ or Sunday. " Last year 61.1% planned to shop over the Black Friday weekend and 55% actually did shop for a total of 133.7 million holiday shoppers. Also, 79.6% (or 183.8 million unique shoppers) plan to or may shop on Cyber Monday.
• The NRF is projecting holiday sales to grow by 3.7% this season to $630.5 billion versus the 4.1% growth rate experienced last holiday and the 10-year average of 2.5%. Within our coverage, holiday spending trends have the biggest impact on Apple, AU Optronics, Corning and LG Display.
• In terms of tech gifts, the Consumer Technology Association (CTA) anticipates "record-setting tech sales" during Black Friday Week with an estimated 91 million (or 37% of U.S. adults) Americas planning to purchase tech or tech accessories over the next week. CTA lists the top 10 tech products that consumers plan to purchase during the Black Friday Week as follows: 1) video game consoles (vs. #5 last year); 2) televisions (also at #2 last year); 3) tablets (vs. #1 over the past two years); 4) laptops; 5) smartphones; 6) headphones; 7) DVD/Blu-ray Disc players; 8) digital cameras; 9) digital toys; 10) smart watches. • IBM's Watson Trend "scours the Internet - social networks, blogs, forums, comments, ratings, reviews - looking for conversations related to purchase decisions".
• As of last night, the IBM Watson Trend App listed the Apple Watch as holding the top Trend Score at 100 (scores are between 0-100), followed by Samsung TVs (score of 67), Sony TVs (48), Microsoft Surface Pro 4 (38), LG TVs (28), Star Wars Legos (23), Canon Cameras (22), Beats by Dre (21), Vizio TVs (19), Nikon Cameras (19), Sony Cameras (17), Apple iMac Computers (15) and more. We have previously voiced our view that the Apple Watch will be a big hit this holiday season and data from the IBM Watson Trend App is supportive of our opinion. We believe this holiday could be the inflection point for the Apple Watch, driving an acceleration in the adoption rates in 2016 and beyond.

The firm maintained a price target of $200 on Apple.

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 $119.30 yesterday.

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