After a much anticipated Black Friday season, Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Abercrombie & Fitch Co. (NYSE:ANF) came out on top.
Despite not lowering prices for the holiday season, Apple drove a Black Friday success for major retailers. The technology giant did not compromise on its brand or differentiation focus strategy to drive sales for the season, particularly for Black Friday where retailers are known to provide deep discounts for a 1-4 day only time period. However, major retailers such as Target and Best Buy were able to have huge success on this day due to its Apple offerings, despite the lack of discounts for its products. Many retailers offered incentives and bonuses for full-priced Apple products, such as Target, which offered gift cards with the purchase of an iPad or Apple Watch. As Apple’s iPhone is its best-selling product, analyst Gene Munster of Piper Jaffray believes that revenue growth directly depends on the upgrade cycle.
In an interview with CNBC’s Squak Alley, analyst Gene Munster of Piper Jaffray expressed positive sentiment regarding Apple’s Black Friday strategy. He commented, “If you just look at Target and Best Buy as two examples, and use them as a barometer, the fact is, they’re really embracing these doorbusters as a sign that demand is pretty healthy here.” Additionally, the analyst’s recent survey indicated narrower gap for iPhone upgrade cycles due to U.S carriers offering a more favorable upgrade plan. He states “we believe that the data is an early positive sign that the shift of US carriers to an installment-based smartphone sales model is enabling users to upgrade their devices more frequently.” He continues that these more frequent upgrades will yield higher annual iPhone revenues per user, stating “We believe the 70% increase in ARPU for iPhone users shifting to annual upgrades driven by the plan is the most important overall financial consideration.”
According to TipRanks, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Gene Munster is ranked #1 out of 3,696 analysts. He has a 70% success rate recommending stocks with an average return of 24.5% per recommendation. Out of the 26 analyst who have rated AAPL in the last 3 months, 27 gave a Buy rating while 9 remain on the sidelines. The average 12-month price target for the stock is $148.77, marking a 26% upside from where shares last closed.
Amazon had a successful Black Friday as well, with third-party sales up 20% from last year since the start of the season. By shopping online with Amazon, customers were able to avoid the infamous Black Friday crowds, as the NRF reported that 103 million people shopped online as opposed to the 102 million who shopped in stores. This season, company adapted its strategy to make the Black Friday longer than just one day, revealing deals as they come instead of all at once. The company started the season on November 20th and the unveiled 10 coveted deals starting the midnight of Thanksgiving, while revealing 10 more on Black Friday. The company also leveraged its mobile platform by offering exclusive mobile-only deals on its app, extending to December 9th.
According to TipRanks‘ statistics, out of the 28 analysts who have rated AMZN in the last 3 months, 24 gave a Buy rating while 4 remain on the sidelines. The average 12 month price target for the stock is $715.33, marking a 6% upside from where shares last closed.
Abercrombie & Fitch Co.
Abercrombie drove huge crowds for its Black Friday sale, offering discounts of up to 50% for its Abercrombie & Fitch and Hollister divisions. This success came in part due to its overall strategy change, a factor that also drove stellar Q3 earnings for the company. The retailer realized that its target audience for Hollister, teenagers, is flocking towards brands such as H&M and Zara due to their runway trends. Therefore, the company decided to follow suit to stay relevant in the industry by changing some of its styles. The company also decided against general discounting. Furthermore, ANF targeted a broader age group (18-25) who are more fashion-savvy as well as in better financial standing than its teen demographic. The company’s Black Friday success represented this shift in design and target market.
According to TipRanks, out of the 10 analysts who have rated ANF in the past 3 months, 2 gave a Buy rating, 1 gave a Sell rating, and 7 remain on the sidelines. The average 12-month price target for the stock is $22.50, marking a 16% downside from where shares last closed.
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