Analysts weigh in on tech giant Apple Inc. (NASDAQ:AAPL) and wearable fitness tracker Fitbit Inc (NYSE:FIT), offering compelling reasons for their ratings and summarizing expectations.
Analyst Tim Long of BMO Capital weighed in on Apple after analyzing its supply chain while also commenting on Intel’s likely contribution to the iPhone 7 and subsequently, the effect on Qualcomm’s share in the device.
Long closely examined Apple’s supply chain, factoring in previous and forecasted revenues of its component suppliers as well as its two largest ODMS. In summary, “Our supply chain model leads us to believe that Apple units in the March quarter should be within the range of our estimates and consensus (50-52 million). For June, we think consensus of 44 million units could be beatable.”
The analyst reiterates his Outperform rating on the company with a $130 price target. He explains, “Our core thesis that the subscriber base is growing is intact, and we expect the growth rate to normalize later this year.”
According to TipRanks, Tim Long has a 42% success rate recommending stocks with a 2.2% average return per recommendation.
As of this writing, out of the 36 analysts who have rated the company in the past 3 months, 29 gave a Buy rating, 1 gave a Sell rating, and 6 remain neutral. The average 12-month price target for the stock is $133.77, marking a 27% upside from where shares last closed.
Analyst Nat Schindler of Merrill Lynch weighed in on Fitbit after his firm conducted market research on its new Blaze watch. The analyst states various positive metrics related to the watch which in his view indicates overall good standing and future growth for the company.
First, the analyst notes that major retailers’ websites such as Best Buy, Target, and Kohl’s “experiencing delayed shipping or individual store outages”, indicating strong sales since the product’s launch. He also states that many stores restocked the product, indicating a retail reorder which was not mentioned in guidance for 2Q.
Schindler points to positive reviews as in indicator of product success. He states that the Blaze watch has an average 3.9 out of 5 rating on major websites such as Amazon and Best Buy, holding the number one spot on Amazon in the smartwatch category, notably beating the Apple Watch, and in the running watch category. He explains, “We believe that this points to a positive reception by consumers and indicates the product is selling and will likely to continue to sell well in FY16 as few competing products exist with similar features at the $199 price point.”
According to the analyst, consensus views do not give the Blaze enough credit and underestimate its potential to “to lift ASP, margins and unit sales.” The analyst believes the Blaze’s versatile features “blurs the line between fitness tracks and smartwatches.” In fact, compared to the Apple Watch, the analyst notes that the Blaze wins in terms of fitness features and battery life. The analyst is also watching for sales from the recently launched Alta watch, believing “the more fashion focused Alta will be a test of Fitbit’s ability to drive upgrades and maintain market share.”
Schindler maintains his Buy rating and $29 price target on the company.
According to TipRanks, Nat Schindler has a 42% success rate recommending stocks with an average loss of (4.4%) per recommendation. Out of the 15 analysts who have rated the company in the past 3 months, 8 gave a Buy rating and 7 remain neutral. The average 12-month price target for the stock is $23.10, marking a 65% upside from where shares last closed.