Apple Inc. (NASDAQ:AAPL) is on the heels of introducing its newest iPhone upgrade to the public. Pre-orders for the new iPhone 7/7 Plus start today and ship September 16th, a little over a week before the quarter closes, with the list of countries prepping the launch having grown from last year’s 12 to 28 countries. Wells Fargo analyst Maynard Um foresees this as the next catalyst for the tech giant.
In AAPL’s favor, Um recognizes, “With Apple launching in 28 countries on Day 1 and 30 more countries the following week, we 1) expect AAPL should have solid first weekend sales and 2) expect there to be low risk to the September quarter. The extra week in the quarter should also set up for better than Street guide for December, though we believe this is known.”
However, even in the midst of appreciating nice new features, like water resistance and the enhanced dual camera, Um finds the positives expected, and the risks of “global economic uncertainties, China exposure, mis-step in product cycle, legal disputes and greater than expected margin pressures” to outweigh the rewards.
Ultimately, though, Um sees, “[…] limited upside potential beyond the high end of our revised range given investor expectations for the raise, narrow visibility into Mar/Jun qtrs (dependent on Dec sell-through) and potential for pull-in of demand from future quarters due to more aggressive country launch plans.”
While Um does recognize greater potential for the iPhone 8, he finds it too early to tell whether, given limited visibility, it will be truly investable.
As such, the analyst downgrades AAPL stock from an Outperform to a Market Perform rating, while adjusting his valuation range from $115 to $125 down to $105 to $120.
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.com, five-star analyst Maynard Um is ranked #182 out of 4,147 analysts. Um has a 65% success rate and yields 13.8% in his annual returns. When recommending AAPL, Maynard garners 19.5% in average profits on the stock.
Out of the 48 analysts polled by TipRanks, 37 rate Apple stock a Buy, 8 rate the stock a Hold and 3 recommend Sell. With a return potential of 18%, the stock’s consensus target price stands at $124.29.
Finisar Corporation (NASDAQ:FNSR) shares are up nearly 15% to $26.66 in pre-market trading Friday, after the fiber-optics parts maker released solid fiscal first-quarter results, posting revenue that came in $7.7 million ahead of consensus estimates and EPS that beat consensus by $0.08.
In reaction, William Blair analyst Dmitry Netis upgraded shares of Finisar from Market Perform to Outperform.
Netis commented, “While we were prepared for a beat-andraise quarter, we misjudged the expectations, which have risen significantly into the print and were up against a slew of issues that haunted the stock for six consecutive quarters. Still, the company delivered an outlook for the fiscal second quarter that was uncharacteristically strong. More importantly, gross margins have shown improvement of more than 200 basis points (on improving product mix and better product volume leverage against fixed costs) and were guided up for the second quarter with an implied upside for the remainder of the year. Finally, revenue growth improved sharply in key product segments (WSS/ROADMs in telecom and 100G in datacom).”
According to TipRanks.com, analyst Dmitry Netis has a yearly average return of 8.4% and a 59% success rate. Netis is ranked #284 out of 4147 analysts.
Out of the 8 analysts polled by TipRanks (in the past 3 months), 5 rate Finisar stock a Buy, while 3 rate the stock a Hold. With a downside potential of 4%, the stock’s consensus target price stands at $24.14.
Lululemon Athletica inc.
Jefferies analyst Randal Konik was out yesterday with a research report, downgrading shares of Lululemon Athletica inc. (NASDAQ:LULU) from Buy to Hold, while reducing the price target from $80 to $76. The analyst argued that the stock looks fairly valued after rallying 30% in the past few months.
Konik wrote, “A key tenet of our upgrade was that LULU was a ‘self-help’ story with margin recovery potential off recent trough levels. This recovery has largely played out, with GM expanding significantly in 2Q’17 and op margins set to expand in 2H. We believe the ‘bear case’ that margins would not recover has been significantly weakened at this point, driving meaningful improvement in investor sentiment.”
“With shares trading above historical avgs, we believe LULU shares present less upside than in the past and see risk/reward as balanced,” the analyst added.
According to TipRanks.com, analyst Randal Konik has a yearly average return of -0.4% and a 44% success rate. Konik has a 0.1% average return when recommending LULU, and is ranked #3043 out of 4147 analysts.
Out of the 19 analysts polled by TipRanks (in the last 3 months), 12 rate Lululemon stock a Buy, 7 rate the stock a Hold and 1 recommends a Sell. With a return potential of 16.50%, the stock’s consensus target price stands at $76.94.