As technology giant Apple Inc’s (NASDAQ:AAPL) annual press event approaches, a variety of Wall Street analysts have weighed in on the stock with their latest predictions and insights of what they believe the company will announce tomorrow.
iPhone 6s and iPhone 6s Plus
There is no doubt in anyone’s mind that Apple will launch the new iPhone 6s and iPhone 6s Plus at tomorrow’s event. Seeing as this is an “S-cycle year” and not a new generation, nobody is expecting a dramatic change in the new iPhones. However, the new iPhone 6s and iPhone 6s Plus are expected to phase out the iPhone 5c generation handsets, placing the iPhone 5s at the bottom on the iPhone tier; the iPhone 6 and iPhone 6 Plus in the middle; and the iPhone 6s and iPhone 6s Plus at the top.
Piper Jaffray analyst Gene Munster believes the new iPhone 6s will be equipped with force touch technology and improved camera and processor features. The analyst believes the force touch feature will allow for creativity in how app developers interact with apps. Munster currently has an Outperform rating on Apple with a $172 price target.
On average, Gene Munster has a 59% success rate recommending stocks and a +20.1% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Apple 148 times since 2009, earning a 67% success rate recommending the stock and a +26.1% average return per Apple recommendation.
The launch of the new Apple TV seems to be the most highly anticipated announcement at the company’s event this year. The new Apple TV is expected to have enhanced capabilities for gaming, apps, and voice interactions. Rumors have also been stirring that Apple TV will have an online streaming service with original content, which will be made available in the App Store. However, there has been some uncertainty on Wall Street about streaming original content and if it has the ability to serve as a driver to strengthen Apple’s valuation.
Macquerie analyst Ben Schachter believes “the new capabilities [in the Apple TV] will increase the market potential for AAPL’s increasingly important App Store as well as its longer-term position for what we expect will be a booming in-home IOT market.”
As far as the idea of streaming original content goes, Schachter believes the App Store has the potential to have “the highest margin and [be the] fastest growing AAPL business.” He continued, “While we don’t expect the current version to attract a lot of core gamers (yet), for family entertainment/casual gaming, the Apple TV App Store could generate new revenue streams for the established publishers.” The analyst currently has an Outperform rating on Apple with a $140 price target.
Ben Schachter has an overall success rate of 84% recommending stocks and a +34.7% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Apple nine times since 2014, earning a 78% success rate recommending the technology giant with a +24.9% average return per Apple recommendation.
Wall Street expects Apple to launch a new iPad Pro with a 12.9 inch screen to appeal to people with creative pursuits who require a large-screened portable device. However, Wall Street is also questioning whether Apple will choose to announce the iPad Pro at its event tomorrow, or if the company will announce it later this year.
Additionally, Apple did not release an updated version of its iPad mini last year as the company launched the iPad Air instead. This has left some to believe there could be a new iPad mini announced at tomorrow’s event.
Wells Fargo analyst Maynard Um believes “Apple could potentially release two iPads come next Wednesday (9/9)–a 7.9 inch iPad Mini 4 and a 12.9 inch iPad Pro.” He added, “Given sales of iPads have been declining in the recent quarters mainly driven by declines in the broader tablet market as well as cannibalization by larger screen iPhones, we believe a release of an iPad Pro could improve growth for a quarter or two.” The analyst currently has an Outperform rating on Apple with a valuation range between $125 and $135.
On average, Maynard Um has a 56% success rate recommending stocks and a +10.2% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Apple 78 times total since 2009, earning a 76% success rate recommending the company with a +22.5% average return per Apple recommendation.
Out of 36 analysts polled by TipRanks who have rated Apple within the past three months, 27 are bullish, 8 are neutral, and one is bearish. The average 12-month price target on Apple $146.00, marking a 33.61% potential upside from where the stock last closed.