Analysts Remain Bullish as Apple Inc. (AAPL) Rumors Stir


Apple Inc. (NASDAQ:AAPL) never ceases to impress the public with new innovations and acquisitions. This week, Apple has been causing a stir with its rumored entrance into the electric car market, and a new music streaming service.

Apple has neither confirmed nor denied suspicions of developing an electric car, but reports claim that Apple is already receiving materials to build them. Apple has been competing with Tesla for talented employees, but onlookers are still unsure if Apple is building its own car or an Apple entertainment system.

The tech giant is also in the midst of creating a music streaming service that would compete with Spotify. Apple purchased Beats headphones for $3 billion last year, an acquisition which will help Apple build its music service. Trent Reznor, the frontman for the band Nine Inch Nails and Beats executive officer, is reportedly taking on a lead role in the project. Apple’s goal for the service is to provide the same music at a lower cost than competitors, but Apple is struggling to persuade record labels to discount licensing costs.

Analysts Commentary

On March 26, analyst Kulbinder Garcha of Credit Suisse maintained an Outperform rating on Apple and raised his price target from $140 to $145. Garcha is bullish on the stock due to iPhone strength in the near term, which is being driven by the continued popularity of the iPhone 6/+. The analyst projects 60 million iPhones sales for March and predicts iPhone sales growing from 193 million in 2014, to 236 million in 2015, to 238 million in 2016. Garcha also has high expectations for the Apple Watch, predicting that 10% of iPhone owners demonstrate a preference to buy it. This comes to about 40 million Apple Watches; double Apple’s estimate of 20 million.

Kulbinder Garcha has rated Apple 38 times since March 2011, earning an 80% success rate recommending the tech giant with a +26.3% average return per Apple recommendation. Overall, Garcha has a 54% success rate recommending stocks with an +8.7% average return per recommendation.

According to SmarterAnalyst, analyst Brian White of Cantor Fitzgerald reiterated a Buy rating on Apple on March 23 and raised his price target from $160 to $180. White noted the release of the Apple Watch will signify Apples “first new product category in five years.” White is also optimistic about the future growth of the iPhone, commenting that “Apple’s iPhone portfolio and position in China have never been stronger.” Lastly, the analyst added that Apple has diligently demonstrated “its commitment to returning cash to shareholders” and he expects more in April.

Brian White has rated Apple 105 times since October 2010, earning a 79% success rate recommending the tech giant with a 29.3% average return per rating. Overall, White has a 66% success rate recommending stocks with a +17.2% average return per recommendation.

On average, the top analyst consensus for Apple on TipRanks is Moderate Buy.

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