Beckoning fresh ambition and momentum, Apple Inc. (NASDAQ:AAPL) seems at an advantage to take a gamble with its priciest iPhone to date, and Micron Technology, Inc.’s (NASDAQ:MU) new CEO Sanjay Mehrotra, co-founder and former CEO of SanDisk, may use his NAND expertise to make a wise M&A move forward. Goldman Sachs looks at Apple with an analytical close-up, finding all of Apple’s risks will be well worthwhile, as this Apple phone is going to take the market by storm- even with a higher ASP. Meanwhile, Susquehanna not only praises Micron’s choice for leadership, but hopes Micron opts to buy Pure Storage from a valuable memory perspective. Let’s dive in:

Apple’s Priciest Gadget to Bring Big Pay off

Apple has a favorable profits and loss balance ahead from the eyes of Goldman Sachs analyst Simona Jankowski who dives into the tech giant’s forthcoming launch of its epic iPhone 8. When glancing ahead, even with more costly materials like OLED and 3D sensing, the analyst predicts the 10th anniversary edition of the iPhone will be in such strong shape that she reiterates a Buy rating on AAPL while hiking the price target from $164 to $170, which represents a just under 10% increase from where the stock is currently trading.

“Our iPhone SKU analysis yields three key conclusions: (1) We expect the iPhone 8 will drive well over 50% of total new iPhone shipments in the first 4 quarters, compared to 51% share of the iPhone 7 Plus in C4Q17 and 34% for the iPhone 6s Plus in its first four quarters. (2) Based on the higher mix and ASP of the iPhone 8, we estimate blended iPhone ASPs of $763 in FY18 or up 16% yoy, compared to the 11% ASP increase in FY15 (the last’super cycle’ with the iPhone 6) and well above consensus at up 2% yoy. Importantly, our sensitivity analysis shows ASPs could be as high as $797 […] (3) We estimate a relatively modest 40bp headwind to iPhone gross margins in FY18, as additions to the bill of materials (OLED, 3D sensing) and higher memory costs are largely offset by the $130 ASP increase in the iPhone 8,” Jankowski concludes.

As such, the analyst likewise lifts fiscal 2018 EPS expectations even more ahead of consensus from $11.00 to $11.50 and for 2019 from $11.30 to $11.75.

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 Simona Jankowski is ranked #383 out of 4,560 analysts. Jankowski has a 65% success rate and realizes 11.8% in her annual returns. When recommending AAPL, Jankowski yields 30.0% in average profits on the stock.

TipRanks analytics show AAPL as a Strong Buy. Out of 33 analysts polled by TipRanks in the last 3 months, 26 are bullish on Apple stock, 6 remain sidelined, and 1 is bearish on the stock. With a return potential of 3%, the stock’s consensus target price stands at $159.21.

Micron’s New CEO to Lead Chip Giant to Long-Term Gains

What will new CEO Sanjay Mehotra bring to Micron’s chip table? Susquehanna analyst Mehdi Hosseini thinks SanDisk’s former CEO is a strategic move on the chip giant’s part, as Mehotra brings with him a wealth of NAND industry experience to the team- an asset that could set Micron up for long-term gains. Growth “is all on the NAND side!” cheers Hosseini, who reiterates a Positive rating on MU with a price target of $35, which represents a close to 21% increase from where the shares last closed.

“[…] we believe Mehrotra’s efforts to cultivate a higher-value solutions offering at SanDisk prior to its acquisition by WDC should not be overlooked. We contend that an aggressive move ‘up the stack’ by MU may be what it needs to alter the narrative from being a cyclical component vendor heavily exposed to DRAM to a vertically integrated storage solutions provider, much the way our top pick WDC (Positive, $140 PT) is positioning itself in the nascent and fast-growing Data Center Solutions market ($23B TAM by 2020). As such, we view the strategic rationale of a vertically integrated play as a compelling argument as MU positions itself for the next generation of cloud infrastructure while (reinvented) incumbents like NTAP pursue the consolidation strategy. Moreover, as we noted in our storage system initiation report (link), proprietary HW margins are under pressure, as hyper-scale cloud customers push for a stoppage of ‘margin stacking,'” Hosseini concludes, assessing that Micron’s best stack-up move would be to acquire Pure Storage, an “attractive target” for the giant and a great memory-centric page forward in transforming its undervalued “narrative.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Mehdi Hosseini is ranked #606 out of 4,560 analysts. Hosseini has a 57% success rate and earns 10.4% in his yearly returns. When recommending MU, Hosseini gains 6.6% in average profits on the stock.

TipRanks analytics demonstrate MU as a Strong Buy. Based on 17 polled by TipRanks in the last 3 months, 15 rate a Buy on Micron stock while 2 maintain a Hold. The 12-month average price target stands at $36.63, marking a 26% upside from where the stock is currently trading.