Between teens showing rising loyalties to being a part of the enticing Apple Inc. (NASDAQ:AAPL) brand and solid momentum for Intel Corporation (NASDAQ:INTC) that has the chip maker in great standing for the first quarter of the year, analysts are out making bullish cases for these tech players. Piper Jaffray has Apple in the lead two teen surveys running, anticipating the tech giant’s cool ranking will strengthen all the more following the release of the iPhone X. Meanwhile, one of Wall Street’s top analysts spotlights a three-part stable PC performance, iPhone’s modem ramp, and 3-D NAND advantage as cause to expect a stellar 2017 for the chip maker. Let’s take a closer look:
Teens Say Apple’s Branding Reigns as Hippest of Them All
Piper Jaffray analyst Michael Olson continues to highlight Apple’s strong position as a device brand leader, particularly among the teen demographic, for two surveys running. After polling over 5,500 teens, the analyst found the best results yet for Apple, with 76% indicating they proudly are part of the iPhone base and 81% believing their next smart phone purchase could very well be an Apple one.
With the results for the tech giant proved even more favorable than Olson’s last survey during the fall of 2016 and more teens raring to join the Apple ecosystem, the analyst predicts “further upside,” and subsequently reiterates an Overweight rating on shares of AAPL with a $155 price target, which represents a just under 8% increase from where the stock is currently trading.
Not only does Apple’s “iPhone [maintain a] strong lead among teens,” but the giant’s Apple Watch continues to rule the roost as the #1 smartwatch for teens. While 84% of teens in the analyst’s survey noted they do not own any smart watches, Apple captured 11% of respondents, a significant step up compared to Samsung Gear as next in line at 2%.
Moreover, Olson forecasts an advantageous risk/reward heading into the fall launch for the hyped iPhone X, elaborating, “With a solid December quarter in the rear-view mirror, if Apple meets March quarter estimates, we think AAPL shares are positioned to continue to run into the Fall ’17 launch of the 10th anniversary device. Our expectation is for AAPL to continue to meet/ beat 1H iPhone estimates, based to some degree on relatively easy comps.”
“Overall, we view the Teen Survey data as a sign that Apple’s place as the dominant device brand among teens remains intact,” concludes Olson.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Michael Olson is ranked #117 out of 4,560 analysts. Olson has a 65% success rate and earns 13.7% in his annual returns. When recommending AAPL, Olson yields 14.2% in average profits on the stock.
TipRanks analytics exhibit AAPL as a Buy. Out of 38 analysts polled by TipRanks in the last 3 months, 29 are bullish on Apple stock, 7 remain sidelined, and 2 are bearish on the stock. With a return potential of nearly 7%, the stock’s consensus target price stands at $152.87.
Intel Poised for Success: Stability in PCs, Data Center, and the iPhone Factor
Top analyst Vijay Rakesh at Mizuho previews Intel ahead of its first quarter earnings for 2017 with a fair amount of confidence in the chip maker, reiterating a Buy rating on INTC with a $42 price target, which represents a just under 17% increase from where the shares last closed.
Anticipating that on the heels of a robust second half of 2016, Intel stands to potentially outperform considering the chip backdrop this time of year. “After a strong 2H16 in PCs, we believe MarQ/JunQ PCs remain stable to better than seasonal. We believe while the PC market remains stable and a tailwind, the focus will be on Data Center (DCG), a 2H iPhone modem ramp and 3DNAND ramp,” Rakesh highlights.
For the first quarter of 2017, Rakesh projects revenue to hit $14.4 billion, EPS to reach $0.65, and GM to land at 62.6%, which largely mirrors consensus modeling 3% dips quarter-over-quarter. For non-GAAP, the analyst looks for the chip maker to bring in $14.8 billion in revenue and $0.65 in EPS, closely matching consensus expectations of $14.8 billion in revenue and $0.56 in EPS. For the financial year of 2017, the analyst sets expectations for $60.3 billion in total non-GAAP revenue as well as $2.80 in non-GAAP EPS, compared to GAAP estimates of $60.3 billion in revenue and $2.50 in EPS. Forecasting the financial year of 2018, the analyst estimates INTC will generate $61.9 billion in revenue and $2.90 in EPS, and GAAP estimates of $61.9 billion in revenue with $2.70 in EPS.
“We believe ODM PC strength is being driven off better U.S corporate PC demand, continued gaming/VR strength with JunQ industry PC shipments potentially trending flat q/q, and ODMs noting DRAM pricing trending up into JunQ,” continues the analyst.
Meanwhile, with Conservative Data Center (DCG) expectations scaled from a 10% to 12% year-over-year climb to a “more conservative ‘high single digit %’ y/y growth,” the analyst believes this “sets up better for investors.” Consensus presently models an 8% year-over-year rise and Rakesh looks for 7% year-over-year growth. Additionally, the analyst notes, “While we believe DecQ Xeon Phi for Deep Learning, grew ~50% q/q, it is still <5% of DCG. We believe NVDA could dominate DL/AI data center market into 2018E.”
Ultimately, Rakesh braces for a “2H17 with iPhone 8 wireless modem builds and 3D-NAND,” surmising, “We believe with our expectations of ~120M iPhone 8 builds and INTC potentially getting at least 50% or more of the builds, it could be a topline tailwind with ~$7-10 ASPs. Also, 3D-NAND, while a margin drag, could help the topline in 2H17.”
Vijay Rakesh has a very good TipRanks score with a 72% success rate and a high ranking of #31 out of 4,560 analysts. Rakesh realizes 28.9% in his yearly returns. When recommending INTC, Rakesh gains 10.1% in average profits on the stock.
TipRanks analytics demonstrate INTC as a Buy. Based on 30 analysts polled by TipRanks in the last 3 months, 16 rate a Buy on Intel stock, 12 maintain a Hold, while 2 issue on the stock. The 12-month average price target stands at $40.68, marking a nearly 13% from where the stock is currently trading.
More stocks covered by top performing analysts can be found here.