Tech analysts weigh in this morning on iPhone maker Apple Inc. (NASDAQ:AAPL) and semiconductor maker Micron Technology, Inc. (NASDAQ:MU). While Apple prepares for its big media event this month, Micron is still struggling from the difficult environment for PCs. Let’s illuminate recent analyst insights on the two tech companies.
Apple will host ‘let us loop you in’ media event on Monday, March 21, with expectations of a new, four-inch iPhone, a new 9.7-inch iPad, new Apple Watch bands and potentially other surprises. Subsequently, Drexel Hamilton analyst Brian White came out this morning with his views on this event.
The analyst expects Apple to launch the iPhone SE with some of the same features found on the iPhone 6s but at a lower price point and with a smaller screen of just 4 inches. Furthermore, given his own research in China and a plethora of media reports, the combination of a more attractive price point, high-quality aesthetics and updated features of the iPhone SE will provide Apple with an improved position in the mid-range, luxury smartphone market.
According to the analyst, a lower-priced iPhone could help Apple’s expansion in India and in Tier 3-5 cities (80-90% of China’s households) in China. “We believe Apple will now be able to better tap into consumers that are just starting to enter the middle class (mostly coming from Asia) in developing countries,” the analyst noted.
White reiterated a Buy rating on shares of Apple, with a price target of $200, which represents a potential upside of 89% 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 Brian White has a total average return of 8% and a 54% success rate. White has an 21% average return when recommending AAPL, and is ranked #145 out of 3809 analysts.
Out of the 52 analysts polled by TipRanks, 38 rate Apple stock a Buy, 11 rate the stock a Hold and 3 recommend Sell. With a return potential of 29.6%, the stock’s consensus target price stands at $137.10.
Micron Technology, Inc.
Susquehanna analyst Mehdi Hosseini downgraded shares of Micron from a Positive to a Neutral rating, while reducing the price target to $10 (from $15), due to the following reasons: “1) our checks from Korea and Taiwan suggest a downtick in DRAM industry bit demand and a softening of ASP assumptions, 2) NAND demand appears to be healthy, but ASP pressure persists, 3) additional debt is needed for Inotera, weighing on the balance sheet and adding debt service costs to the P&L, and 4) in fact, Inotera synergies remain undefined, with “die penalty” associated with mobile and server DRAMs offsetting the cost synergies from consolidating Inotera (into MU P&L) – and thus preventing meaningful GM expansion.”
“While we ultimately believe margins are in a bottoming phase (which has been a key aspect of our reluctance to capitulate to Neutral), we believe the confluence of softer DRAM and uncertain NAND trends coming off our Korea/Taiwan trip, along with an untimely debt raise associated with Inotera, has escalated the risks to our long view,” the analyst concluded.
According to TipRanks.com, analyst Mehdi Hosseini has a total average return of -6.8% and a 42.6% success rate. Hosseini has a -35.8% average return when recommending MU, and is ranked #3426 out of 3809 analysts.
Out of the 21 analysts polled by TipRanks (in the past 3 months), 15 rate Micron Technology stock a Buy, 5 rate the stock a Hold and 1 recommends to Sell. With a return potential of 55%, the stock’s consensus target price stands at $16.82.