Most popular company Apple Inc (NASDAQ:AAPL) is expected to report second-quarter earnings shortly, while security company Palo Alto Networks (NYSE:PANW) experienced positive outcomes from a recent conference. Due to these recent events, analysts have weighed in on the stocks reiterating bullish outlooks for both.
Apple is expected to report F2Q16 results on April 25, 2016. The company’s highest anticipated earnings are projected to be below consensus of $52 billion, with margins falling towards the lower end of guidance. In spite of this, Mizuho analyst Abhey Lamba reiterates a Buy rating on the stock, with a $120 price target. The analyst notes this positive rating is “baked into the stock”.
According to company supply-side checks, Apple’s iPhone shipments may possibly fall below consensus of 50 million units, while iPad unit shipments may continue to struggle as well. However, according to the analyst, Macs are expected to incline, though they minimally impact the company’s overall performance according to the analyst.
Lamba notes that management is likely to call for revenues and GM to reach between $45 billion and $48 billion, with ranges being between 38.0-39.0% for F3Q16. In comparison, these numbers fall on the short end of the spectrum of the $48bn and 39.5% consensus.
The analyst comments that he expects iPhone upgrade activity to be limited among buyers due to the anticipated upcoming product cycle. On a more optimistic note, Lamba mentions the iPhone SE launch will likely improve sales.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Abhey Lamba has a yearly average return of 6.6% and a 66% success rate. Lamba has a 25.5% average return when recommending AAPL, and is ranked #363 out of 3788 analysts.
Out of the 52 analysts polled by TipRanks, 40 rate Apple stock a Buy, 9 rate the stock a Hold and 3 recommend a Sell. With a return potential of 24.0%, the stock’s consensus target price stands at $136.32.
Palo Alto Networks Inc
Palo Alto Networks has recently portrayed positive VAR (value at risk) and customer conversions during its recent user conference. In light of this, UBS analyst Brent Thill has weighed in on the stock reiterating a Buy rating, while reducing the price target to $180 (from $186).
According to Thill, there are five prominent themes contributing to the positive results. The first of these, is convergence of traditionally separate enterprise networking infra/security ops disciplines. In regards to this, the analyst explains this “should give PANW more airtime and continue likelihood of displacement success”.
The second theme includes rationalization of vendor sprawl, to which Thrill comments, “we think standalone APT market and even CASB could witness dynamics similar to the standalone IPS market as inline, natively integrated platforms are better resonating from a TCO and visibility perspective.”
Further, growing network traffic compounded by wireless, IoT, according to the analyst should lead to “sustainable growth fuel as increased throughput requirements (tightens hardware depreciation cycles) and need for network segmentation increase”
Additionally, Thill believes next generation endpoint is of substantial interest. However, this concept is still maturing with contenders.
Lastly, the analyst mentions the company is still receiving high remarks for networking prowess, architecture, and cohesive features as well as configuration ease and solid management, to which Thill notes are “bigger plusses.”
According to TipRanks.com, analyst Brent Thill has a yearly average return of 12% and a 68% success rate. Thill has a 45% average return when recommending PANW, and is ranked #76 out of 3788 analysts.
Out of the 37 analysts polled by TipRanks, 34 rate Palo Alto stock a Buy, while 3 rate the stock a Hold. With a return potential of 37%, the stock’s consensus target price stands at $195.26.