Analysts are weighing in on the technology giant Apple Inc. (NASDAQ:AAPL) and newly spun-off tech giant HP Inc (NYSE:HPQ). Here’s a quick roundup of recent brokerage notes on AAPL and HPQ.
In a research report released Friday, FBR Capital analyst Daniel Ives reiterated an Outperform rating on shares of Apple, with a price target of $175. Through his Black Friday Apple store checks, Ives revealed growing interest in Apple Watch sales heading into the holiday season.
Ives wrote, “While supply constraints/a choppy launch period have caused stumbles out of the gates for Cook & Co. on the Apple Watch front since April’s unveiling, we have slowly seen momentum in the field over the last few months; this morning, we heard of ramping interest/sales among consumers based on our conversations at various Apple, Target, and Best Buy stores. While Watch unit sales have been roughly 6 million since launch, based on our analysis and improving consumer interest heading into the holiday season, we believe Watch sales in the December quarter should be close to the 5 million-/6 million-unit mark.”
“Taking a step back, Apple Watch is still a rounding error on overall Apple sales; however, the wearables category is an important area for Apple going forward, and Watch sales are being closely watched into the holiday season as a barometer for future growth/product areas,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Daniel Ives has a total average return of 6.6% and a 61.3% success rate. Ives has a 0.1% average return when recommending AAPL, and is ranked #328 out of 3646 analysts.
Out of the 50 analysts polled by TipRanks, 37 rate Apple stock a Buy, 11 rate the stock a Hold and 2 a recommend Sell. With a return potential of 26%, the stock’s consensus target price stands at $148.86.
In a research report issued Wednesday, FBN Securities analyst Shebly Seyrafi initiated coverage on shares of HP, with a Sector Perform rating and price target of $13.50, which implies an upside of 6% from current levels.
In explaining his neutral Sector Perform rating Seyrafi stated, “Key concerns include continued strong competition in printing (especially from Japanese competitors Canon and Epson), slow-growing TAMs (CAGRs of LSD% in printing and 4% in personal systems), currency, and strong competition in the 3D printer market, a market where investors have not been rewarded recently from their investments in DDD, SSYS or VJET.”
To the company’s credit, the analyst noted, “Key positives include a strong recurring revenue from supplies (about a quarter of HPQ’s revenue and a larger percentage of operating profits), a very negative cash conversion cycle (CCC), large TAMs ($230B+ in printing (A4) and $340B+ in personal systems), opportunities to penetrate the copier (A3) market, the ability to penetrate the office printing market with inkjets (ink in the office) by leveraging its PageWide technology, opportunities (and challenges) in the 3D printer market (which HPQ expects to enter next year), and a stabilizing PC market due to an easier comp in F2016 (as F2015 faced a tough comp due to the end of support for Windows XP in early 2014), benefits from Windows 10 ramping (noting that Windows 10 sentiment is now 75%, 25pp higher than Windows 8), and new Intel Skylake processors helping driver better performance.”
According to TipRanks.com, analyst Shebly Seyrafi has a total average return of 1.4% and a 52.0% success rate. Seyrafi has a -26.3% average return when recommending HPQ, and is ranked #1309 out of 3646 analysts.
Most of the analysts covering HP remain on the sidelines. A total of 28 analysts currently provide ratings; 17 of them suggest a Hold, while 11 recommend a Buy rating. The 12-month consensus mean price target for the stock is $25.45, reflecting a nearly 100% upside over today’s closing price.