Oppenheimer Upgrades Apple (AAPL) to Outperform; iPhone 6/6 Plus Launch Seen as Major Success
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(Updated - October 9, 2014 7:34 AM EDT)
Oppenheimer upgraded Apple (NASDAQ: AAPL) from Perform to Outperform with a price target of $115. Analyst Andrew Uerkwitz expects the iPhone 6/6 Plus to be, by far, Apple's most successful phone launch.
"Due to its numerous hardware and software upgrades, we are expecting market share gains as well as a shorter replacement cycle. We also expect AAPL to keep investor interests high when Apple Pay and Apple Watch piggy back on the iPhone's success; though earnings contribution from both will initially be minimal. One risk to our call—despite having above Street estimates, we believe Apple Watch sales will initially underwhelm, but be a long-term success," said Uerkwitz.
"We believe iPhone 6 and 6 Plus combined will be the best selling iPhone generation to-date as iOS 8 and larger displays draw much broader consumer appeal than before—ultimately growing Apple's market share. (risk: sales are so good, next gen iPhone sales decline year-on-year)," continued the analyst. "We believe iPhone 6 and iOS 8 will bring important features to AAPL's overall ecosystem that increases user stickiness: 1) Apple Pay, 2) HealthKit and Health App, and 3) integration between OS X and iOS, and 4) HomeKit. We believe these will drive market share gains."
Uerkwitz sees revenue/EPS of $182.9B/$6.43 and $208.1B/$7.31 for Q4 and FY15.
Shares of Apple closed at $100.80 yesterday.
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