Apple Inc. (NASDAQ:AAPL) and American Airlines plc (NASDAQ:AAL) are two of the most popular stocks on Wall Street, with both companies achieving an overall bullish consensus from sell-side analysts. On average, analysts believe each company has an approximate 38% potential upside from where shares last closed. Here are the latest analyst insights on each stock:
Apple Inc has been the talk of Wall Street as the company gets ready for its “special event” on September 9. While everyone expects the company to announce the latest versions of the iPhone, rumors have been circulating about what surprises Apple has in store.
Macquerie analyst Ben Schachter, who maintained an Outperform rating on Apple with a $140 price target on September 1, believes the company will launch a new version of the Apple TV that will include enhanced capabilities for gaming, apps and voice interactions. The analyst believes “the new capabilities 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.”
Furthermore, Schachter believes Apple is exploring original content that could be made available in the App store. With that said, 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.”
On average, Ben Schachter has an 81% success rate recommending stocks and a +34.5% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Apple nine times total since 2014, earning a 67% success rate recommending the technology giant and a +24.3% average return per recommendation.
Piper Jaffray analyst Gene Munster, who most recently reiterated an Overweight rating on Apple with a $172 price target on August 31, also expects Apple to announce updates on the new Apple TV. He anticipates that the product to have an App store and feature Siri. Munster believes the chances of Apple TV having a TV-streaming service are slim as the company would likely want to acquire enough content first. He noted, “We believe Apple contests that you can’t cut the cable unless you have a broader content offering. We note that while you can get the major networks with a $20 HD antenna, it’s a clumsy experience that is not ready for the masses.”
Munster also believes Apple is planning on entering the augmented reality space “based on recent acquisitions of augmented reality companies, hiring of a key Microsoft Hololens employee, and conversations with industry contacts within the virtual and augmented reality spaces.” While augmented reality is “10 years away from broader consumer adoption,” Munster believes “it has the potential to be as profound a technology platform as the smartphone today.”
Overall, Gene Munster has a 59% success rate recommending stocks and a +20% average return per recommendation when measured over a one-year horizon and no benchmark. He has made 148 ratings on Apple since 2009, earning a 67% success rate recommending the stock and a +25.8% average return per recommendation.
Out of 34 analysts polled by TipRanks within the past three months, 25 analysts are bullish on Apple, 8 are neutral, and 1 is bearish. The average 12-month price target on the company is $148.86, marking a 38.19% potential upside from where the stock last closed.
American Airlines plc
American Airlines has been progressively growing its flight operations in an effort to raise unit revenue, most recently announcing plans to launch eight new flight services to Venezuela, Mexico, Latin America, and the Caribbean. Additionally, the company has also been working to add more aircrafts to its existing 964 operating commercial aircrafts.
However, American Airlines is currently trading closer to Passenger per available seat mile (PRASM) commentary in the near-term, indicating that there are more available seats on flights. Imperial Capital analyst Scott Buck weighed in on American Airlines in light of this news, reiterating an Overweight rating on the stock but cutting his price target from $73 to $65.
The analyst acknowledges, “Despite reporting the best quarterly results in the industry’s history and guidance suggesting a record 2015, AAL shares, and those of other airlines, continue to trade closer to PRASM commentary near term.”
In the long term, however, Buck expects “PRASM trends to turn more positive moving into the second half of 2016 as near-term revenue trends are likely to face similar headwinds as 2Q15, including increased competitive capacity and weaker macroeconomic trends in South America.”
Overall, Buck views American Airlines as an “earnings story and believe investors should turn their attention to record operating results rather than PRASM.”
On average, Scott Buck has a 33% success rate recommending stocks and a +3.1% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated American Airlines four times this year, earning a 67% success rate recommending the company and a +29.7% average return per recommendation.
Out of 9 analysts polled by TipRanks within the past three months, 5 analysts are bullish on American Airlines and 4 are neutral. The average 12-month price target on the company is $54.29, marking a 38.49% potential upside from where the stock last closed.