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Apple, Facebook Among Top Technology Investment Choices

Facebook ( FB ) received honors as the top Internet investment idea by Credit Suisse, followed by Amazon.com ( AMZN ) and Alphabet ( GOOGL ). In tech hardware, Apple ( AAPL ) is a favorite. Credit Suisse based its picks on a six- to 12-month time horizon. Credit Suisse analyst Stephen Ju says Facebook can drive long-term revenue growth without a material lift in ad loads. Near-term ad growth drivers include Facebook’s video- and photo-sharing site Instagram and its premium video, which brings in high ad rates. He says Wall Street’s projections for Facebook are too conservative and underestimate the long-term moneymaking potential of other products, including Messenger and WhatsApp. Ju has a price target on Facebook stock of 135. Facebook stock was down 2.5%, near 110, in afternoon trading in the stock market today . Amazon, Ju’s No. 2 investment, should provide upside to estimates, he says, in part from ongoing strength in e-commerce. Ju has a price target on Amazon of 800. Amazon stock was up a fraction Friday afternoon, near 593. Ju expects Alphabet to narrow the monetization gap between mobile and desktop, while increasing ad loads. He also expects Alphabet to get strong growth from YouTube and its Google Play app store. His price target on Alphabet stock is 930. Alphabet stock was down a fraction Friday afternoon, near 756. Regarding Apple, Credit Suisse analyst Kulbinder Garcha rates it a top investment idea, saying multiple growth drivers include its strength with the iPhone, iPad and Mac computer and greater adoption of the iOS ecosystem. Another is Apple’s commitment to cash distributions. Garcha has a price target on Apple of 150. Apple stock was trading above 128, up a fraction, Friday afternoon.

Google Picture Brightens, Thanks To Larger-Screen Smartphones

Fast growth for YouTube and mobile search — along with expected positive benefits from the wider adoption of large-screen smartphones — netted a price-target boost for Alphabet ( GOOGL ) and its Google subsidiary on Thursday. Morgan Stanley raised its price target on Alphabet stock to 900 from 880. Smartphones with big screens — such as Apple ‘s ( AAPL ) iPhone 6S Plus and Google Android Galaxy Note 5 by Samsung — will have a positive impact on Google’s revenue, wrote Morgan Stanley analyst Brian Nowak in a research report. “Indeed, the growing mix of large-screen smartphones combined with our agency conversations (are) indicating that these screens are monetizing higher,”  Nowak wrote. He says such ads are getting 20% to 35% higher costs per click, which is how much Google is paid each time someone clicks an ad. He says larger-screen smartphones could boost Google’s search revenue by 3%. Ahead of the Alphabet’s Q1 earnings release, “we see Google websites growing the fastest (they have) in over four years, driven by accelerating mobile search and YouTube,” wrote Nowak. Alphabet is slated to post Q1 earnings after the market close on April 21. Alphabet stock was down more than 1% in afternoon trading in the stock market today , near 758. Alphabet stock is forming a cup-with-handle base, with a 777.41 buy point. Morgan Stanley boosted its 2016 and 2017 revenue estimates for Alphabet by 1%, to $88.3 billion and $129 billion, respectively. It raised its 2016 EPS ex items estimate 4% to $35.99, and its 2017 estimate 3% to $43.49. “We are now 2% ahead of Street Q1 2016 revenue and non-GAAP EPS, and 1% ahead of full-year 2016 revenue, and 4% ahead of full-year 2016 non-GAAP EPS,” said Nowak. “We see accelerating top line, expanding core Google, non-GAAP EBITDA (earnings before interest, taxes, depreciation and amortization) margins, and positive revisions driving Google higher.” The number of minutes spent on YouTube minutes is estimated to grow 42% year over year in Q1, Nowak said, vs. a 23% rise in Q4 2015.

Apple Price Target Cut On Lengthening iPhone Replacement Times

Apple ( AAPL ) iPhone owners aren’t upgrading to new handsets as quickly as they have in the past, a situation that is limiting upside for Apple stock. BTIG analyst Walter Piecyk on Thursday lowered his price target on Apple stock to 130 from 141 but maintained his buy rating. Apple stock was down nearly 1.5%, near 109.50, in midday trading on the stock market today . Piecyk cut his estimates for Apple iPhone sales in fiscal 2016 and 2017 based on “a more conservative outlook for the upgrade cycle of existing users.” He also reduced his revenue expectations for the Apple Watch, given the recent price cuts to the device. He does not expect higher volumes to offset Apple Watch price cuts. “We have broader concerns that there is a structural change underway in the pace of (iPhone) upgrades,” Piecyk said in a report. “It will take a few quarters and the launch of the next iPhone to confirm if end users are, in fact, holding onto their phones longer.” Apple also is facing a resurgent Samsung, which is seeing brisk sales of its new flagship Galaxy S7 smartphones , he said. Apple’s latest smartphone, the low-cost 4-inch iPhone SE, is seeing stock-outs and shipping delays, signs of strong demand, AppleInsider  reported Wednesday. The iPhone SE, which starts at $399, went on sale March 31. Image provided by Shutterstock .