International megabanker Deutsche Bank (DB) has initiated Apple (AAPL) coverage with a “Buy” recommendation and a $650 price target, due to the tech giant’s smartphone and tablet dominance.
In a report published Thursday, DB’s Sherri Scribner noted the company’s top position as original equipment maker as well as its prospects for higher sales with the introduction of the new iPhone. The report also stated that DB expects the Cupertino, Calif.-based company to see long term growth due to new products.[via Barron’s Tiernan Ray]”While our model does not currently include the benefit of a new product introduction, we believe Apple still has the ability to ‘surprise and delight’ its customers, therefore any new and successful product would provide upside to the company’s already above-market growth rates. With revenue growing faster than the market, despite the company’s large market cap, we believe shares should trade in line with market multiples,” writes Scribner, adding that “Trading below market multiples at 11x our FY-15E, we view shares as attractive.”
Scribner’s $650 price target assumes a multiple of 14X the expected EPS of $46.50 for FY 2015.
Apple shares are down $2.53, or 0.48%, today, trading at $520.95 as of 12:43PM EDT.