Two analysts are getting increasingly bullish on Apple Inc. (NASDAQ:AAPL) and Micron Technology, Inc. (NASDAQ:MU) as they believe these tech giants are ready to impress. Between Apple delivering the much-awaited iPhone 8 with updated features that are sure to entice consumers and Micron riding NAND and DRAM momentum to likely back-to-back EPS quarterly beats, J.P. Morgan and UBS are lifting price targets with high conviction. Let’s dive in:
Apple Dominates Rumor Mill with iPhone Speculation
Apple’s flashy new gadget continues to captivate tech enthusiast attention, with every analyst on the Street setting expectations on the illustrious 10th anniversary edition of the iPhone model due this coming fall.
Taking under account “high pent-up replacement demand,” J.P. Morgan analyst Rod Hall has tagged on Apple to his analyst focus list (AFL) while stepping up estimates in a bullish preview of the new iPhone 8’s charged launch.
As such, the analyst reiterates an Overweight rating on shares of AAPL while boosting the price target from $142 to $165, which represents a 17% increase from where the stock is currently trading. Anticipating increased iPhone unit and ASP projections, the analyst subsequently raises his EPS projection to $11.74 for 2018 while adjusting his unit forecast from 245 million to 260 million units for 2018.
Hall elaborates, “We also take a detailed look at OLED supply to Apple and conclude that this should not be a limiting factor but probably will keep Apple from making two OLED models. Multiple iPhone ‘Pro’ features including 3D facial scanning, a glass heavy design, and a structured-light-enabled camera look likely to us and should drive users to upgrade phones that are older, on average, than they have been for four years.”
Ultimately, “New phone features look compelling. Unlike the iPhone7, the new iPhone SKUs look compelling. We believe the high-end OLED ‘iPhone Pro’ is likely to have 3D facial recognition, glass front/back, a structured-light-augmented main camera, a larger screen in a smaller feeling form factor than prior 5.5″ models, wireless charging, and a price tag of ~$1,000. We also believe the new 4.7″ and 5.5″ LCD SKUs are likely to have the all-glass form factor and wireless charging as well,” Hall contends.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Rod Hall is ranked #1,012 out of 4,554 analysts. Hall has a 48% success rate and earns 6.6% in his annual returns. When recommending AAPL, Hall gains 14.8% in average profits on the stock.
TipRanks analytics indicate AAPL as a Buy. Out of 37 analysts polled by TipRanks in the last 3 months, 29 are bullish on Apple stock, 6 remain sidelined, and 2 are bearish on the stock. With a return potential of nearly 9%, the stock’s consensus target price stands at $153.07.
Micron Brings Fierce NAND and DRAM Game to the Table
On the heels of Micron’s stellar second fiscal quarter performance, UBS analyst Stephen Chin‘s confidence in the chip giant’s success only continues to escalate, as he predicts a series of EPS beats prepare to thunder ahead. With a one-two punch of better NAND and DRAM backing Micron’s unfolding velocity, the analyst reiterates a Buy rating on MU while upping the price target from $30 to $32, which represents a 10% increase from where the shares last closed.
“Micron guided its May-17 quarterly EPS to $1.50, significantly higher than consensus at $0.90 and one of the biggest guidance beats we have seen in semis since NVIDIA’s big beat in its Oct-16 quarter. We keep a Buy rating as we still see the possibility of more EPS beats in its Aug-17 and Nov-17 quarters as new smartphones ramp with possibly higher NAND content. Most of the near term revenue and EPS upside is from higher NAND sales. Micron guided its bit sales of NAND in F2H17 to be up 30% versus F1H17 with most of the upside in this May-17 quarter. We believe this shows strong demand for NAND in the near term. Micron also showed better NAND execution with GM at 31%, up 800bps qoq. Micron’s execution in DRAM is also improving with DRAM gross margin at 44%. We believe Micron is making progress closing the wide gap that historically existed between its 2 competitors,” Chin contends.
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, five-star analyst Stephen Chin is ranked #102 out of
TipRanks analytics show MU as a Strong Buy. Based on 18 analysts polled by TipRanks in the last 3 months, 17 rate a Buy on Micron stock while 1 maintains a Hold. The 12-month average price target stands at $35.50, marking a nearly 23% upside from where the stock is currently trading.