Wall Street’s top analysts are delving into leading tech titans Apple Inc. (NASDAQ:AAPL) and Micron Technology, Inc. (NASDAQ:MU), with Piper Jaffray remaining bullish on Apple despite constrained inventory revealed from in-store iPhone 7 checks and with Credit Suisse positive ahead of fiscal fourth-quarter earnings. Let’s take a closer look:
Piper Jaffray top analyst Gene Munster is out with a research report on shares of Apple after iPhone 7 checks in 134 Apple Stores across the U.S. continue to exhibit constrained inventory. Yet, noting a 20% improvement in in-store iPhone 7 availability, Munster reiterates an Overweight rating on shares of AAPL with a $151 price target, which represents just under a 34% upside from where the stock is currently trading.
Munster believes, “Going a level deeper, the iPhone 7 which we believe will account for about 40% of total iPhone 7 units had 61% SKU availability, compared to 8% available for the iPhone 7 Plus. In China we measured even tighter supply at 16%. The limited supply of the iPhone 7 Plus should bode well for the Dec quarter outlook as demand shifts from September to December. Despite the supply, we expect Sep revenue of $47.5B vs. Street of $46.5B. We remain positive on shares of AAPL on our continued belief in an iPhone 7 cycle and the iPhone 10 potential next year.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top five-star analyst Gene Munster has achieved a high ranking of #6 out of 4,197 analysts. Munster upholds a 67% success rate and garners 19.1% in his annual returns. When recommending AAPL, Munster earns 12.3% in average profits on the stock.
TipRanks analytics indicate APPL as a Strong Buy. Based on 36 analysts polled in the last 3 months, 31 rate a Buy on AAPL, 4 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $128.41, marking a nearly 14% upside from where the shares last closed.
Micron Technology, Inc.
Micron is set to deliver fiscal fourth-quarter results tomorrow and will host a conference call at 4:30 p.m. The semi-conductor giant has positively previewed fiscal fourth-quarter revenue and GM on September 8th, but did not release EPS.
Ahead of earnings, Credit Suisse top analyst John Pitzer reiterates an Outperform rating on shares of MU with a $20 price target, which represents a 12% increase from where the stock is currently trading.
Pfizer anticipates MU will meet fiscal fourth-quarter revenue of $3.20 billion, which mirrors the analyst’s estimate and hits above the Street of $3.14 billion, as well as implied EPS of ($0.07), which falls below both Pitzer’s projection of ($0.11) and consensus of ($0.13). This confirms the analyst’s perception of MU’s fiscal third-quarter as “the trough of the current cycle” with an EPS loss of ($0.08), juxtaposed against the past three cycles indicating a median trough loss of ($0.70).
When considering fiscal first-quarter revenue and EPS guidance, Pfizer expects revenue guidance of $3.60 to $3.80 billion and EPS guidance of $0.15 to $0.20. Though the analyst notes these guidance possibilities considerably beat consensus estimates of $3.44 billion and $0.08, respectively, Pitzer contends, “guidance is likely to fall short of market implied price trends (and more bullish buyside expectations) which support approx. $3.80bn/$0.25, reflecting what has been very conservative guidance from CFO Ernie Maddock since joining the Company in F3Q15.”
Additionally, Pitzer anticipates “modest upside” to his current year of 2017 EPS projection of $1.63, which is “well ahead” of consensus at $0.99. Pitzer also takes into account the timing of a prospective deal with Intolera, which could be dilutive to 2017 earnings but accretive to 2017 free cash flow.
“Looking out in CY17, we see a much more constructive stock narrative driven by: (1) recent supply cuts in DRAM which could put CY17 bit growth at 15-20% versus 20-25% in CY16, (2) a better than expected cost position at 3D NAND where MU has gone from the high cost producer in 2D to what is now a #2 position behind Samsung in 3D, and (3) better product mix – NAND increases to 40-45% from 30-35% of Rev, more Enterprise SSD and Mobile NAND, and more Mobile DRAM,” Pitzer concludes.
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, top five-star analyst John Pitzer has achieved a high ranking of #96 out of 4,197 analysts. Pitzer upholds a 73% success rate and realizes 13.1% in his annual returns. When recommending MU, Pitzer yields 13.9% in average profits on the stock.
TipRanks analytics demonstrate MU as a Buy. Based on 17 analysts polled in the last 3 months, 13 rate a Buy on MU, 3 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $19.92, marking a 12% upside from where the shares last closed.