Analyst Daniel Ives of FBR & Co. revealed what he expects to see at next week’s CES Conference in Las Vegas. He highlights virtual reality and wearables as main categories in the conference, with Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ:APPL) as strong players.
Ives believes virtual reality, drones, wearables, and autonomous cars will dominate CES, as tech giants such as Apple, Facebook, and Microsoft go head-to-head showcasing their products. The analyst is expecting virtual reality products, such as headsets and software, to take a lead role in the conference. He specifically points to Facebook’s Oculus Rift and mentions other competitors, although he believes “Price points, consumer traction (e.g. gaming), and ultimately attracting the developer community/apps will be key swing factors in the long term success of virtual reality technology.” He then points to Apple as a potential major competitor in this industry in 2016, leveraging the “natural next generation consumer technology that plays well into its unrivaled iPhone ecosystem.”
Ives also expects “wearables to be taking center stage on the CES floor” and cites the Apple Watch’s lackluster entrance as a catalyst for competitors to enter the $20 billion market in the next three years. He continues by stating his expected focus on third-party apps in this category, which “will represent a key driver of use cases for wearables,” as company’s try to prove themselves as the wearables standard. Similarly, he sees a shift to smarter wearables, with key players developing new software to enhance devices. He states, “While it remains very early days, we believe wearables represent a major tangential growth opportunity in terms of the Internet of Things (IoT), which is expected to be the centerpiece of much technology innovation slated for 2016 with Apple, IBM, Google, Intel, Cisco, and Microsoft leading the IoT charge in our opinion.”
According to TipRanks’ statistics, out of the 34 analysts who have rated Facebook in the last 3 months, 33 gave a Buy rating while 1 remains on the sidelines. The average 12-month price target for the stock is $125.33, marking a 19% upside from current levels.
For Apple, out of the 31 analysts who have rated the company in the past 3 months, 25 gave a Buy rating while 6 remain on the sidelines. The average 12-month price target for the stock is $146.49, marking a 38% upside from current levels.