Maxim Group lead analyst Nehal Chokshi came out with a special research report on Apple Inc. (NASDAQ:AAPL), initiating coverage with a Hold rating and a price target of $144, which represents a potential upside of 14% from where the stock is currently trading.
Chokshi noted, “Based on our discussions with multiple bearish AAPL investors, we believe that fears of ASP and margin compression loom large. However, our survey data indicates that wireless carriers will remain in a “prisoner’s dilemma.” Specifically, we find that ~40% of loyal iPhone users have a similar usage profile to the 11% of current iPhone users who intend to switch away. We define these users as latent switchers, or in other words, those who wouldn’t stay loyal to the iPhone if their carrier stopped carrying it.”
Furthermore, “Our analysis indicates that this retention rate is still too low for carriers to walk away from AAPL’s premium pricing terms. Finally, our data on loyal iPhone usage profiles shows little change over the past three years, giving us confidence that latent switcher rates will remain at the current 40% level. Thus, even if Android pricing completely commoditizes, AAPL’s premium price + subsidy should remain intact, and we note that growth of installment plans make the premium pricing even less detectable.”
Out of the 83 analysts polled by TipRanks, 61 analysts rate Apple stock a Buy, 20 rate the stock a Hold and 2 recommend a Sell. With a return potential of 9.65%, the stock’s 12-month consensus target price stands at $138.34.
Piper Jaffray analyst Gene Munster also weighed in on Apple stock Monday, maintaining an Overweight rating with a price target of $160, which implies an upside of 25% from current levels.