Analysts are weighing in on the technology giant Apple Inc. (NASDAQ:AAPL) and online payment giant Paypal Holdings Inc (NASDAQ:PYPL), offering compelling reasons for their ratings and summarizing expectations.
FBR Capital analyst Daniel Ives was out pounding the table on Apple Friday, reiterating an Outperform rating and price target of $170, which represents a potential upside of 41% from where the stock is currently trading.
Ives wrote, “As we look back on this “white knuckle” period for Apple shares it has been quite a roller coaster ride for investors with the curtain call coming this week as Cook & Co. delivered better than feared Sept. results/Dec. guidance. Ultimately, despite rampant China fears, iPhone 6 hangover worries, negative chatter in the supply chain, and overall market jitters, Apple came through with a strong print and healthy forecast for holiday season which should help restore some positive sentiment back in the story heading into 2016.”
“With iPhone 6s growth fears now back in the bear’s cave, we believe the Street will start to positively reevaluate the Apple growth path for 2016 as the confluence of: 1) a healthier than expected iPhone 6s product cycle, 2) China white-hot growth continuing with a $100 billion market opportunity ahead for the next three years, 3) streaming growth areas taking center stage and opening up a major tangential market opportunity (we believe streaming TV gets announced in 1H16), and 4) iPad Pro ramping in the enterprise and rekindling tablet growth prospects, should now pave the way for a FY16 growth story ahead of the “game changer” iPhone 7 release,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Daniel Ives has a total average return of 6.2% and a 58.6% success rate. Ives has a 0.6% average return when recommending AAPL, and is ranked #477 out of 3808 analysts.
Out of the 49 analysts polled by TipRanks, 36 rate Apple stock a Buy, 11 rate the stock a Hold and 2 recommend Sell. With a return potential of 23.4%, the stock’s consensus target price stands at $148.88.
Paypal Holdings Inc
In a research report published yesterday, Baird analyst Colin Sebastian reiterated an Outperform rating on shares of Paypal, with price target of $45, after the company reported solid third-quarter results, with revenue missing consensus by less than 1% and EPS beating by 6%.
Sebastian observed, PayPal reported impressive TPV growth, while revenues slightly missed expectations on soft cross-border/international volumes (China export/Europe). More positively, US revenue growth accelerated for the second consecutive quarter (+20% vs. +19% in 2Q15), while engagement trends continue to improve. Given PayPal’s merchant momentum., quickening pace of innovation, (e.g., OneTouch, Venmo monetization), and seemingly reasonable valuation, we would be buyers on a pullback.”
“While PayPal’s growth is primarily driven by consumer usage and engagement, we note that PayPal’s Paydiant acquisition could help accelerate merchant adoption by integrating loyalty programs and private-label payments,” the analyst continued.
According to TipRanks.com, analyst Colin Sebastian has a total average return of 20.6% and a 77.3% success rate. Sebastian has a -9.7% average return when recommending PYPL, and is ranked #17 out of 3808 analysts.
Out of the 32 analysts polled by TipRanks, 21 rate Paypal Holdings Inc stock a Buy, 8 rate the stock a Hold and 3 recommend Sell. With a return potential of 18.4%, the stock’s consensus target price stands at $42.03.