Apple Upgraded…Just In Time
BAML analyst Wamsi Mohan, who had cut his firm's rating on Apple to neutral in early November, returned his assessment to "buy" with a price target of $210 per share, a 16.6% increase from the bank's previous level. Monhan said that a "large reversal of inventory overhang" for Apple iPhones, as well as stability in the group's global supply chain and "modest" acceleration in services revenue growth has improved the group's valuation. He also predicated the group will announce a near-term share buyback plan.
I think the upgrade is a bit too late. I mean Apple bottomed at $142 and the upgrade comes after a $36 rise in the stock price.
However, maybe the upgrade was timed with the Apple announcement. Apple Inc. announced a March 25th event to introduce an original video programming service and a new premium magazine subscription plan.
Apple has been talking about a video service for a long time, but appears serious this time…probably due to lowering sales of iPhones. The video service is expected to launch globally, available in 100 countries right away and rivaling services from Netflix Inc and Amazon.com Inc’s Prime Video immediately.
Like Amazon, Apple’s video service plans to resells Starz and other channels (Apple is having discussion with HBO as well) and keeps a cut of the sales.
The magazine subscription service will be integrated into the existing Apple News app and is based on the company’s acquisition of Texture last year.
NOTE: Texture, a magazine virtual newsstand known as the “Netflix of magazine publishing” gave readers access to around 200 magazines for $9.99 / month.
The new services will contribute to Apple’s services which is on pace to generate $50 billion per year by 2021, the company has said.
So how high can Apple go in the near term, the chart suggest Apple can climb to as high as $205.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Apple had better do something to at least try to innovate as their brand is already losing the “vanguard-type” lure it once had. With over $100 billion in cash, they may just buy into it!
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The next couple of years will be interesting, although I think they can make a lot of noise if they use their watch for medical purposes.