Apple (AAPL) Named Top 2017 Pick at Needham & Company

Needham & Company analyst Laura Martin named Apple (NASDAQ: AAPL) its Top Pick for 2017 and reiterated a Strong Buy rating and price target of $150.

Martin sees 4 analytical building blocks: 1) catalysts; 2) fundamentals; 3) technical analysis; and 4) valuation.

Potential catalysts for AAPL during 2017 potentially include a falling corporate tax rate and repatriation of over $200B from cash balances offshore.

Fundamentally, they think the right way to think about AAPL’s barriers to entry, pricing power, and competitive advantage period is through the lens of its ecosystem dominance of the wealthiest 15% of smartphone owners in the world.

Martin notes that Berkshire Hathaway has been steadily adding shares of AAPL over the past year, and as of 9/30/16, they owned 15.7mm shares, worth $1.7B.

She said AAPL looks inexpensive at 12x P/E, which ignores AAPL’s cash (its P/E is closer to 8x adjusted for cash). AAPL has a 2% dividend yield and a 9% FCF yield, and we expect AAPL to generate more than $50B of FCF in 2017.

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 $115.19 yesterday.

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