Analysts separately explain why they are bullish on both Apple Inc. (NASDAQ:AAPL) and Oracle Corporation (NYSE:ORCL) as the next six months should be exciting for Apple due to upcoming positive catalysts, while cloud transition inflection and other metrics could improve sentiment around Oracle.
Nomura analyst Jeff Kvaal reiterated a Buy rating on shares of Apple, with a price target of $135, as he believes that fundamentals are intact with a number of upcoming positive news.
Kvaal noted, “We believe Apple intends its new 4” phone to balance cannibalizing current models and offering poor value for the $400-$500 price – the 5c’s downfall. We have modest 10- 20mn unit volumes expectations for the SE. Other tablet/watch news may not move the needle. […] iPhone estimates of 50/44/47mn over the next three quarters look low. Apple’s March guidance equates to >52mn, and included a heavy dose of macro concern. Our checks in Asia and at MWC indicate a steady demand climate and improving (if unevenly) order patterns. While our estimates (52/50/53) may mark the high end of the feasible range, we would expect consensus to come towards us.”
The analyst concluded, “We expect a drumbeat of positive news items – new products, improving supply chain, rising capital returns, iPhone 7 – to drive the shares higher. We expect rising iPhone subscriber base to restore unit volume growth sooner than consensus estimates anticipate.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jeff Kvaal has a total average return of 8.4% and a 45% success rate. Kvaal has an -3.7% average return when recommending AAPL, and is ranked #496 out of 3724 analysts.
Out of the 52 analysts polled by TipRanks, 38 rate Apple stock a Buy, 11 rate the stock a Hold and 3 recommend a Sell. With a return potential of 34%, the stock’s consensus target price stands at $137.64.
Merrill Lynch analyst Kash Rangan reiterated a Buy rating on shares of Oracle, with a price target of $48, which implies an upside of 24% from current levels.
Rangan wrote, “Our long-term thesis is that cloud economics could trump the negative impact from increased competition that Oracle faces across all its businesses. […] We believe that we are close to an infection point in revenue, OI and gross profit growth, with the worst of the declines possibly behind us. However, if the cloud transition of Oracle ’s largest business – database – which is just beginning, is faster than expected, the inflection point could be pushed out post FY17E.”
According to TipRanks.com, analyst Kash Rangan has a total average return of 6.6% and a 62% success rate. Rangan has a 14.3% average return when recommending ORCL, and is ranked #542 out of 3724 analysts.
Out of the 32 analysts polled by TipRanks, 18 rate Oracle stock a Buy, 12 rate the stock a Hold and 2 recommend a Sell. With a return potential of 14%, the stock’s consensus target price stands at $44.04.