Canaccord analyst Michael Walkley weighed in today with his views on iPhone maker Apple Inc. (NASDAQ:AAPL), following recent surveys which indicate that consumers are delaying iPhone purchases ahead of iPhone 7.
Walkley wrote, “Based on our survey work, we believe consumers continue to delay purchases of new iPhones ahead of the iPhone 7 launch likely in September. In fact, we believe iPhone sales in the US market will fall below 50% of total smartphone sales during the June quarter for the first time since the larger screen iPhone 6 products launched. While we anticipate a decreasing replacement rate through September as consumers delay upgrading their iPhones ahead of the anticipated iPhone 7 launch, we do anticipate recovering sales with the iPhone 7.”
“Longer term, we believe the iPhone 6 and iPhone 6s products have enabled Apple to materially increase its share and installed base of the premium tier smartphone market with Android users switching to the iPhone. We believe the iPhone installed base exceeded 500M at the end of C2015 and overall connected Apple devices exceed 1B users. This impressive installed base should drive strong future iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns programs of $250B through F2018,” the analyst continued.
Walkley reiterated a Buy rating on AAPL, with a price target of $130, which represents a potential upside of 39% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, Walkley is ranked #29 out of 3910 Wall Street analysts. The analyst has a yearly average return of 13% and a 56% success rate.
Out of the 51 analysts polled by TipRanks, 40 rate Apple stock a Buy, 9 rate the stock a Hold and 2 recommend a Sell. With a return potential of 40%, the stock’s consensus target price stands at $130.81.
International Business Machines Corp.
Following meeting with IBM Security leaders Marcvan Zadelhoff and Mike Loria, Morgan Stanley analyst Kathryn Huberty is out with a research note. Huberty rates IBM shares an Overweight, with a price target of $168.
Huberty wrote, “IBM Security revenue growth accelerated in recent quarters, from 12% growth last year to 20% in 1Q16, as the company fulfills its vision of offering a tightly integrated product portfolio. Many customers struggle with integration of 20-40 different security vendors as well as outsized growth in security spending in recent years. What’s more, the shortage of security experts makes managing a fragmented suite of products even more difficult. IBM is taking shareas customers look to consolidate vendors and manage gaps between products, something IBM can increasingly do after 20 acquisitions in 10 years.”
Furthermore, “At $2B in revenue in CY15, IBM Security is one of the largest security businesses in the industry – comparing to $2B Enterprise Security revenue in CY15 at Symantec (53% total), $1.7B and 4% of revenue at Cisco, $1.6B at Check Pointand $623M at FireEye. The majority of revenue comes from software but also includes a considerable services business. IBM is ranked as a leader (by Gartner, Forrester, IDC) in 13 of 14 core categories of Security.”
According to TipRanks.com, analyst Kathryn Huberty has a yearly average return of 13.6% and a 58% success rate. Huberty has a 2.1% average return when recommending IBM, and is ranked #109 out of 3910 analysts.