Analysts are weighing in today on electronics giant Apple Inc. (NASDAQ:AAPL), semiconductor giant Advanced Micro Devices, Inc. (NASDAQ:AMD) and yoga apparel giant Lululemon Athletica inc. (NASDAQ:LULU). Here’s a quick roundup of today’s brokerage notes on AAPL, AMD and LULU.
In a remarkably confident call, Merrill Lynch analyst Wamsi Mohan upgraded shares of Apple, from a Neutral to a Buy rating, with a $130 price target, which represents a potential upside of 31% from where the stock is currently trading.
Mohan explained that his bullish conviction about Apple was due to: “(1) our China Apple survey which indicates continuing strong demand for iPhones, 2) potential release of iPhone 6c (4” version) which could drive increased conversions from feature phones, 3) AAPL stock remains underweight at long-only funds and there may be room for upside as investors increase their holdings, and 4) large cash balance which offers the optionality to enter new markets and create new revenue streams.”
According to TipRanks.com, a site that tracks and ranks analysts on their predictions, analyst Wamsi Mohan has a yearly average return of 4.6% and a 52.5% success rate. Mohan has a -2.5% average return when recommending AAPL, and is ranked #803 out of 3594 analysts.
As of this writing, out of 32 analysts polled by TipRanks in the last 3 months, 26 rate Apple stock a Buy, while 6 rate the stock a Hold. With a return potential of nearly 40%, the stock’s consensus target price stands at $138.52.
Advanced Micro Devices, Inc.
Canaccord analyst Matt Ramsay reiterated a Hold rating on shares of Advanced Micro Devices (NASDAQ:AMD), while raising the price target to $2.40 (from $2.00), following an upbeat management meeting at CES.
Ramsay wrote, “While NVIDIA’s strong market position in discrete and gaming GPUs remains, we left very impressed with the graphics division’s new roadmap and focus. Overall, we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible longterm sales beginning in earnest in 2H/16 as the roadmap moves onto FinFET nodes. While Q3/15 results marked the first simultaneous Q/Q growth in both businesses in several years, revenue still declined ~25% Y/Y and another restructuring is just underway to properly size the cost structure. Finally, while AMD’s engineering teams continue to introduce well-architected APU and GPU products, competitors Intel and NVIDIA maintain foundry and scale advantages.”
Bottom line, “Despite believing in the leadership under AMD’s new CEO Lisa Su, we wait for tangible signs of multi-quarter business stability before becoming more constructive. We maintain our HOLD rating, but raise our price target from $2 to $2.40 as our 2H/16 GPU estimates increase slightly.”
According to data compiled by TipRanks.com, analyst Matt Ramsay has a yearly average return of -10.4% and a 31.5% success rate. Ramsay has a -33.1% average return when recommending AMD, and is ranked #3468 out of 3594 analysts.
The overwhelmingly majority of analysts still say AMD is a “hold.” The average forecast is for the stock to hit $2.51 in the coming months.
Lululemon Athletica inc.
Finally, MKM Partners analyst Roxanne Meyer reiterated a Buy rating on shares of Lululemon, while raising the price target to $69 (from $60), after the company raised its fiscal 2015 earnings and revenue guidance for the fourth quarter.
Meyer commented, “Based on revised sales guidance, we believe comps were at the upper end of the revised HSD range (from MSD); we are now modeling a 4% store comp (6 point acceleration on a two-year stack vs. 3Q) and a 25% increase in DTC. LULU’s revised guidance is indicative of continued momentum December-to-date and reflects the strength of new product, particularly in pants; recall LULU was running ahead of plan when it reported 3Q. Total comps have improved on a two-year stack with each quarter of 2015, and we estimate new store productivity may have inflected in 4Q.”
“We believe the stage is set for momentum to continue in 2016, particularly as supply chain initiatives kick in and reflect improved design processes. Additionally, we look for innovation to continue to drive sales; we look for bottoms to continue to outperform, while the tops category is expected to be re-energized in 2H. Additional upside could stem from the website relaunch,” the analyst added.
According to TipRanks.com, analyst Roxanne Meyer has a yearly average return of 10.6% and a 68% success rate. Meyer has a 4.5% average return when recommending LULU, and is ranked #425 out of 3594 analysts.