Cautious View on Apple Stock – Analyst


Apple Stock Jumps as the Tech Giant Asks Suppliers To Produce 72-78 Million iPhone7s This Year

According to a recent report from Taiwan’s Economic Daily, it has been revealed that Apple Inc (AAPL) has asked its suppliers to produce between 72 and 78 million new iPhones by the end of the year, a figure that is significantly above analyst estimates of 65 million iPhone 7s.

The 72-78 million target is the highest production target in about two years, notes the paper, adding that a jump of at least seven million units is significant. The newspaper calls out September 13 as the date Cupertino will introduce the iPhone 7. The date would fall in line with past iPhone events.

In other Apple news this morning, Barron’s Alexander Eule has written an article over the weekend with a cautious view on AAPL stock, saying “the great hope for the computer giant’s stock is its ability to tap its vast user base for services. But as Apple Music shows, it won’t be easy.”

Apple began trading this morning at $95.87 to currently trade 1.83% higher from the prior days close of $95.22. On an intraday basis it has gotten as low as $95.67 and as high as $97.15. Last week, Warren Buffett disclosed a $1.07 billion long position in Apple prompting the name to finish the week up 5.19%, at $95.22, still 28% off its FY 2015 high. Apple shares have declined 9.60% in the last 4 weeks and 1.12% in the past three months. Apple is down 26.04% year-over-year, compared with a 3.47% loss in the S&P 500.

On valuation measures, Apple shares are priced at 10.79x this year’s forecasted earnings, compared to the industry’s 11.19x earnings multiple. The company’s current year and next year EPS growth estimates stand at (10.2%) and 10.50%, compared to the industry growth rates of (10.00%) and 12.60%, respectively. AAPL has a t-12 price-to-sales ratio of 2.29. EPS for the same period registers at $8.98.

Apple is currently valued at $531.09 billion. The name has a median Street price target of $120 with a high target of $185.

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