Wrapping up 2016, Drexel Hamilton analyst Brian White highlights his top picks for IT hardware and software for the coming new year. From where the analyst stands, Apple Inc. (NASDAQ:AAPL) and salesforce.com, inc. (NYSE:CRM) are heading for massive resurgences come 2017.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Brian White is ranked #137 out of 4,291 analysts. White has a 57% success rate and gains 8.6% in his annual returns. When recommending AAPL, White garners 19.8% in average profits on the stock. However, when suggesting CRM, White loses 1.0%.
Let’s take a closer look:
Apple: Globally One of the Most Underappreciated Stocks
In 2016, the analyst’s picks did not have their best year. Apple did outclass the S&P 500 Index, but only just “slightly.” However, White predicts “2017 could be a breakout year for the stock.” Meanwhile, though White sees 2016 has been a year CRM struggled, with shares that “meaningfully underperformed the market,” he anticipates “strong fundamental trends will drive an outperformance in 2017.”
With regards to the tech giant, White asserts, “In our view, Apple is one of the most underappreciated stocks in the world and has underperformed the market since the end of 2014. In the near-term, we look for Tim Cook to make Apple grow again in 1Q:FY17 on the back of the iPhone 7 and a happy holiday season, while we look forward to the launch of iPhone 8 in September 2017 and more color on future innovations.”
Noting AAPL’s cash total hitting $237.6 billion, with $216 billion overseas, the analyst recognizes positive prospects for tax repatriation policies for the giant. Moving forward, White hopes for Apple to reach 3.5% to 4.0% in a dividend yield.
As such, the analyst remains bullish on the giant closing out the year, reiterating a Buy on AAPL shares with a price target of $185, which implies a 59% upside from current levels.
TipRanks analytics exhibit AAPL as a Strong Buy. Out of 26 analysts polled by TipRanks in the last 3 months, 21 are bullish on Apple stock and 5 remain sidelined. With a return potential of 15%, the stock’s consensus target price stands at $134.28.
Salesforce: 2017 Could Be a Big Comeback Year
2017 could be a pivotal year for the cloud computing player, as White sees a great deal of equity prospects ahead for CRM. Particularly with further development of the e-commerce platform provider Demandware acquisition under its belt since June, the analyst sees Salesforce as a 2016 dark horse in the competition now ready to take the lead.
White opines, “In our view, Salesforce represents the best equity vehicle for investors to play the cloud trend. In 2017, we believe Salesforce will continue to expand the reach of its Service Cloud and further ramp the Commerce Cloud […], while also demonstrate early traction with Einstein.”
Though the company dipped 12% this year and considerably underperformed the up 10% when assessing the S&P 500 Index, the analyst nonethless bets on CRM with full confidence, contending, “We believe the stock can outperform the market in 2017.
Predicting a pivotal stock rebound for Salesforce, the analyst moves full bullish steam ahead into the new year, reiterating a Buy on CRM with a $100 price target, marking a just under 46% increase from where the shares last closed.
TipRanks analytics indicate CRM as a Strong Buy. Based on 36 analysts polled by TipRanks in the last 3 months, 33 rate a Buy on CRM, 2 maintain a Hold, and 1 issues a Sell. The 12-month average price target stands at $93.84, marking a 36% upside from where the stock is currently trading.