Analysts are weighing in today on the technology giant Apple Inc. (NASDAQ:AAPL), financial giant Bank of America Corp (NYSE:BAC), and Canadian drug company Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here’s a quick roundup of today’s brokerage notes on AAPL, BAC, and VRX.
Credit Suisse analyst Kulbinder Garcha reiterated an Outperform rating on Apple shares, with a price target of $140, despite growing concerns that Apple’s smartphone growth is cooling off and could be disappointing in the near term.
Garcha commented, “Our own checks and Dialog’s recent pre announcement, as well as research from our Asian team, suggest a deeper cut in December and March production volumes. The cuts seem to be driven by weak demand for the new iPhone 6s, as overall builds are now estimated to be below 75-80mn units for the December quarter and between 45-50mn units for the March quarter.”
The analyst continued, “While the near-term pressures exists, we note several factors are important when assessing the outlook for the iPhone business. First, based upon our installed base analysis, we believe that the iPhone installed base will grow to 610mn over time driven by its recent expansion (24% in the past year). Second, the new installment plans over time will drive higher units long-term. Third, we note that Apple’s recent capex guidance and purchase obligations suggest our iOS units have 33% upside (providing some evidence that it may intend to launch a 4-inch screen device).”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kulbinder Garcha has a yearly average return of 7.9% and a 52.4% success rate. Garcha has a 17% average return when recommending AAPL, and is ranked #385 out of 3632 analysts.
Out of the 49 analysts polled by TipRanks, 36 rate Apple stock a Buy, 11 rate the stock a Hold and 2 recommend a Sell. With a return potential of 34%, the stock’s consensus target price stands at $146.98.
Bank of America Corp
Deutsche Bank analyst Matt O’Connor was out pounding the table on Bank of America Wednesday, reiterating a Buy rating and price target of $19.00, which represents a potential upside of 9% from where the stock is currently trading.
O’Connor wrote, “We view BAC as the purest play on rising interest rates/a better US economy. Outside of macro drivers, earnings should be less volatile than some peers given de-risking of the loan book and right-sizing of sales and trading), expenses should continue to grind down and capital concerns should be alleviated given good organic build. BAC shares trade at 1.1x times 9/30 tangible book and 1.0x on a forward basis (we estimate 9% TBV growth over the next year). Valuation should improve if mgmt is successful in executing its strategy to be the low cost provider within consumer banking and operating with a lower risk profile. Given these, we rate BAC a BUY.”
According to TipRanks.com, analyst Matt O’Connor has a yearly average return of 4% and a 67.5% success rate. O’Connor has a 5.7% average return when recommending BAC, and is ranked #589 out of 3632 analysts.
According to TipRanks’s data, 18 analysts are bullish on Twitter and 4 are neutral and 2 are bearish.The average 12-month price target on the stock is $18.87, marking a 8% potential upside from where the stock is currently trading.
Valeant Pharmaceuticals Intl Inc
BMO Capital analyst Alex Arfaei reiterated a Market Perform rating on shares of Valeant Pharma, with a price target of $133, following the company’s Investor Day, where the company updated its guidance.
In explaining his neutral rating Arfaei stated, “While some components of the guidance may appear disappointing, we suspect that it is conservative. About 7.2% of Valeant’s YTD global net revenue was from specialty pharmacies. On November 2, 2015, we lowered our estimates stating that Valeant could lose ~80% of its specialty pharmacy business, or roughly one-third of the U.S. dermatology business. Today’s announcement indicates that the specialty pharmacy impact is not only immediate, but somewhat worse than expected. While 2016 revenue guidance is in line with consensus, lower-than-expected EPS guidance indicates to us that the increase in expected volume from the Walgreens agreement is not enough to offset the loss of more profitable products from the specialty pharmacy business at higher prices, at least in the near term.”
According to TipRanks.com, analyst Alex Arfaei has a yearly average return of 5.4% and a 67.2% success rate. Arfaei has a -13.6% average return when recommending VRX, and is ranked #663 out of 3632 analysts.
Out of the 22 analysts polled by TipRanks, 15 rate Valeant stock a Buy, 6 rate the stock a Hold and 1 recommends a Sell. With a return potential of 41%, the stock’s consensus target price stands at $164.81.