Piper Jaffray analyst Gene Munster surveyed lines outside Apple Stores in New York City Friday morning, and he found that the trend toward more capacity devices continues, which should be positive to ASPs over the next year. The analyst also believes that a slower trend toward the larger screen iPhone is emerging and he expects that could benefit ASPs over the next several years. Munster noted today, “While our sample size was small (78 people vs. our typical 300-400), we believe the data is still directionally relevant and is slightly positive for Apple revenue over the next few years.”
According to Munster, the iPhone 6S launch line at 8AM ET at the 5th Avenue NYC store was about 650 people long compared to last year’s record 1,880 for the iPhone 6 launch. However, he views the shorter line as generally in line with his expectations for the following reasons: “First, China was added as a launch country for the first time, reducing iPhone resellers in line. Second, “S” cycles have historically had shorter lines than their respective number change cycles. Third, Apple continues to promote pre-orders/online sales. We remain comfortable with our 12-13 million opening weekend unit estimate.”
Munster reiterated an Overweight rating on Apple shares, with a price target of $172, which represents a potential upside of 50% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 20.5% and a 60.8% success rate. Munster has a 26.6% average return when recommending AAPL, and is ranked #4 out of 3759 analysts.
Out of the 49 analysts polled by TipRanks, 33 rate Apple stock a Buy, 14 rate the stock a Hold and 2 recommend a Sell. With a return potential of 26%, the stock’s consensus target price stands at $146.85.
Paypal Holdings Inc
Canaccord analyst Michael Graham initiated coverage on shares of Paypal Holdings with a Buy rating and a $43 price target, which implies an upside of 27.5% from current levels.
Graham wrote, “We expect PayPal to continue its steady growth trajectory, benefiting from the long-term shift to cashless payments and continued eCommerce growth. Despite an increasingly complicated online landscape, we think Braintree, One Touch, and Venmo all should enhance the company’s growth and contribute to upside potential for estimates. We find the company’s position in offline payments less compelling, with risks related to trying to take share from well-entrenched incumbents. However, we are comforted by our perception that the stock is discounting very little offline success. We feel the valuation nearly reflects the growth profile in our base case. However, we see a tangible upside scenario that could lead estimates and the stock higher.”
“Our price target is based on 25x our 2017 non-GAAP EPS estimate of $1.72. We believe this is a fairly rich multiple relative to PayPal’s growth prospects. However, the increased earnings power implied in our upside scenario makes us more comfortable with the valuation,” the analyst added.
According to TipRanks.com, analyst Michael Graham has a total average return of 10.2% and a 55.6% success rate. Graham is ranked #230 out of 3764 analysts.
Out of the 28 analysts polled by TipRanks, 19 rate Paypal Holdings Inc stock a Buy, 6 rate the stock a Hold and 3 recommend Sell. With a return potential of 24.2%, the stock’s consensus target price stands at $42.13.