William Blair analyst Anil Doradla is offering insights on Apple Inc. (NASDAQ:AAPL) after arch-AAPL rival Samsung Electronics announced on Monday morning of its plans to acquire Harman for $112 per share in cash, or circling $8 billion in equity value. Both corporate boards have approved the deal, but are currently awaiting shareholder and regulatory approval on Harman’s end, with the transaction anticipated to wrap by the middle of 2017.
On the heels of the news, the analyst reiterates an Outperform rating on shares of AAPL without suggesting a price target. Doradla believes, “Given the interplays and convergence between the consumer electronics world and the automotive world, the announcement does not come as a surprise,” and specifically underscores the implications for Apple.
How did this acquisition come to play? From the analyst’s standpoint, “Given Samsung’s recent woes in the handset space, we believe the company’s acquisition is an attempt to leapfrog any potential moves by Apple in this space.”
However, Doradla ultimately remains unfazed by Samsung’s competitive step, contending, “With respect to Apple, we do not believe Samsung’s acquisition will have any impact on the company. In our opinion, Apple’s strategy will revolve around organic solutions rather than large acquisitions such as Harman. As we have witnessed, over the past several months there has been speculation around Apple’s involvement in the smart car market. […] While some may speculate that Apple could make a counter offer, we do not expect that to be the case given Apple’s relative position of strength and the company’s past record.”
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 Anil Doradla has a 69% success rate and garners 15.9% in his annual returns. When recommending AAPL, Doradla realizes 10.1% in average profits on the stock.
TipRanks analytics exhibit AAPL as a Strong Buy. Out of 34 analysts polled by TipRanks, 28 are bullish on Apple stock, 5 remain sidelined, and one is bearish on the stock. With a return potential of 18%, the stock’s consensus target price stands at $130.47.