Piper Jaffray analysts came out today with a few insights on tech giant Apple Inc. (NASDAQ:AAPL) and video-streaming giant Netflix, Inc. (NASDAQ:NFLX). The analysts reflect on Apple’s upcoming event in March and Netflix’s valuation, which offers an attractive entry point.
Piper Jaffray analyst Gene Munster reiterated an Overweight rating on shares of Apple, with a price target of $172, following the news that Apple will reveal a new, smaller iPhone in an event in March. Munster is one of Apple’s biggest bulls, and he is also one of the top analysts rated who cover the stock.
Munster noted, “While the timing for Apple Watch and iPad Air 3 make sense given their product lifecycle (1 year and 1.5 years since last update), we still believe the timing still makes less sense for the 4″ iPhone. Our logic for the smaller phone timing is that if Apple were to launch the smaller phone in the spring, it would be quickly outdated when the redesigned iPhone 7 comes out in six months (September). A spring 4″ iPhone event also shifts the iPhone news track to two events a year, which could take away from releases of other products.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a yearly average return of 18% and a 57.1% success rate. Munster has a 20.6% average return when recommending AAPL, and is ranked #7 out of 3632 analysts.
Out of the 53 analysts polled by TipRanks, 40 rate Apple stock a Buy, 10 rate the stock a Hold and 3 recommend a Sell. With a return potential of 44%, the stock’s consensus target price stands at $138.
Piper Jaffray analyst Michael Olson upgraded shares of Netflix from a Neutral to an Overweight rating, with a price target of $122, citing an attractive entry point given the recent pullback.
Olson commented, “NFLX is down ~30% in the past two months due to concerns around slowing domestic growth and competition. We believe these issues, and the offsetting positive tailwinds of international growth, are reasonably reflected in our estimates and valuation methodology, which result in a NFLX price target of $122 (unchanged). Based on this, we are upgrading NFLX to Overweight from Neutral and recommend taking advantage of this pullback to build/increase positions.”
“Our consistent commentary on NFLX has been that it is a volatile name and while we expect the general trend to be “up and to the right,” we also expect periodic pullbacks and would look to take advantage of attractive entry points; we believe this is one of those opportunities. Our subscriber growth, margin and other assumptions remain unchanged, but we are slightly lowering our PT multiple based on recent domestic slowdown and potential for increased competitive intensity,” the analyst continued.