Analysts are weighing in on the technology giant Apple Inc. (NASDAQ:AAPL) and online retail giant Amazon.com, Inc. (NASDAQ:AMZN), with mixed ratings and views.
On September 28, Apple announced record sales for the iPhone 6s and iPhone 6s Plus. As per the company, it has set a new record by selling over 13 million of the new models within three days of the launch. Analysts Gene Munster of Piper Jaffray and Abhey Lamba of Mizuho Securities weighed in on Apple following the announcement.
Munster concluded that the iPhone 6S cycle is off to a good start. He said these figures were at the high end of his expected 12 to 13 million units sold. The analyst noted, “While units are up more than 30% from last years’ launch, we believe the organic unit number excluding China may be a more accurate indicator.” As per Munster, if 2 million units sold from China over the opening weekend, it would mean a year-over-year increase in organic units of 10% as opposed to the flat growth modeled by the Street. He added, “If the trend continues, we expect modest (around 3%) upside to iPhone units over the next year.” Munster maintained an overweight rating on the stock with a price target of $172.
On the other hand, Mizuho’s Lamba is not so satisfied with Apple’s performance. He’s maintained a “Neutral” rating on the stock and feels the sales do not appear as overwhelmingly positive.
Sharing the reasons for his disappointment, Lamba said, “The jump of 30% over the first weekend’s sales of the previous version would be a positive if it was a like for like comparison.” While Lamba is impressed with the unit volumes, he notes the increase comes from a larger initial distribution as compared to last year. This time, Apple made the new iPhones available in 12 regions, including China, as opposed to 10 last year. He concluded by saying, “We continue to view Apple as a strong franchise but reiterate that it could be tough for the company to post meaningful shipment growth in this cycle.”
Of all the 36 analysts polled by TipRanks who have recently rated the stock, 26 have rated Apple a Buy, 9 have rated it a Hold, and only 1 has given a Sell rating. The average price target for the stock, based on targets set by each of these analysts over the past 12 months, is $146.22. That’s a roughly 30% upside over present levels.
In a research report issued yesterday, Oppenheimer analyst Jason Helfstein reiterated an Outperform rating on shares of Amazon, with a price target of $525, as the company will host its AWS re:Invent Conference in Las Vegas on October 6-9.
Helfstein wrote, “We expect the company to focus on new tools/services that make it easier for enterprises to adopt AWS. Last year’s conference focused on higher margin software and applications as opposed to processing and hardware. We believe this year’s focus will be on new software and apps, with continued examples of large enterprises going “all-in” with the AWS cloud. We believe the next two years will see very strong volume growth, as AMZN is focused on accelerating enterprise adoption. As such, AWS will likely focus on vast system integrator relationships, which help transition workloads to the cloud. Since large price cuts have been muted for the last 18 months, we believe there is a 70% chance of a 10-20% EC2 price cut. We view minor price cuts (10% or less) as a positive for AMZN shares.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Helfstein has a total average return of 3.7% and a 44.9% success rate. Helfstein has a 31.5% average return when recommending AMZN, and is ranked #820 out of 3754 analysts.
Out of the 43 analysts polled by TipRanks, 37 rate Amazon stock a Buy, while 6 rate the stock a Hold. With a return potential of 17.5%, the stock’s consensus target price stands at $594.79.