Analysts are weighing in on the technology giant Apple Inc. (NASDAQ:AAPL) and global nutrition giant Herbalife Ltd. (NYSE:HLF), as both companies are expected to release their latest financial reports starting around late October.
In a research report published Wednesday, FBR Capital analyst Daniel Ives reiterated an Outperform rating on shares of Apple, with a price target of $175, as the company is scheduled to report its fiscal fourth-quarter (Sept) results on October 27 after the bell.
Ives noted, “We expect revenue/EPS in line with consensus estimates of $50.9 billion/$1.89 with 49 million iPhone units for the quarter. Apple has become a battleground stock given the confluence of China headwinds, worries about 6s growth prospects, and uninspiring June results. While concerns over an “iPhone 6 hangover” remain a black cloud over the name, all eyes on the Street are focused on iPhone guidance for the December quarter with a 75 million number being the bogey.”
“Although there are conflicting reports in the supply chain around mixed demand for 6s following stellar opening weekend sales (13 million), we believe this is overblown as Apple has ramped up its supply of iPhones with a few tweaks in order to meet healthy demand and is on pace to show year-over-year growth for FY16. This will be a bipolar outcome for Apple (and its investors) following results/guidance, as the narrative for the Apple story rests on the shoulders of 6s with “good enough” December guidance starting to turn the tide in a positive direction, in our opinion,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Daniel Ives has a total average return of 3.1% and a 49.7% success rate. Ives has a -6.5% average return when recommending AAPL, and is ranked #1008 out of 3773 analysts.
Out of the 50 analysts polled by TipRanks, 34 rate Apple stock a Buy, 14 rate the stock a Hold and 2 recommend Sell. With a return potential of 32.2%, the stock’s consensus target price stands at $147.69.
Canaccord analyst Scott Van Winkle weighed in today with his expectations on Herbalife Ltd. (NYSE:HLF), as the company will be reporting its third-quarter earnings on Tuesday, November 3, 2015. The analyst reiterated a Buy rating on HLF, with a price target of $58, which implies an upside of 6% from current levels.
Winkle wrote, “We expect Q3 results to meet our revenue forecast and guidance, while we see opportunity for EPS upside on greater expense control than we have forecasted. We believe the key takeaway will be further narrowed sales and volume point declines (on a YoY basis) across most regions, setting up the likelihood of a return to volume point growth in Q4 and demonstrating a moderating impact from the marketing plan changes early in the year.”
Furthermore, “We expect the daily consumption model and successful customer loyalty program to continue to deliver strong growth, as we forecast a 40%+ (similar to Q2) increase in sales and volume points. The loyalty program is essentially an incentivized preferred customer program that improves line of sight on product sales as ~25% of regional volume in Q2 was purchased directly from Herbalife.”
Bottom line, “Growth should remain elusive in the Q3 report, pressured both by the weight of changes to the marketing plan and a significant negative currency impact that continues to heighten. However, HLF is close to cycling through its marketing plan changes and anniversarying the most dramatic strengthening of the US dollar.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Scott Van Winkle has a total average return of 3.7% and a 46.5% success rate. Winkle has a 10.1% average return when recommending HLF, and is ranked #909 out of 3773 analysts.
Out of the 5 analysts polled by TipRanks, 3 rate Herbalife stock a Buy, while 2 rate the stock a Hold. With a return potential of 24%, the stock’s consensus target price stands at $67.98.