Macro supply-chain pressures might have impacted Apple’s (AAPL) recent relatively disappointing FQ4 (September) print, but Tigress analyst Ivan Feinseth believes these issues are transitory.
In fact, the analyst thinks product demand, new product introductions, and “accelerating” Services should all keep the bears at bay.
It goes without saying, but Feinseth notes “demand is a good problem to have” and it is present for all of Apple’s “key products,” iPhone included. Despite global supply issues, the analyst expects the tech giant will “eventually ramp up production to meet what will continue to be extremely strong demand.”
Furthermore, in the quarter almost every segment boasted meaningful year-over-year growth which reached new heights. Record levels of advertising and payments revenue and record subscriptions for music, video, and cloud services were behind the Services strong display. Apple now counts more than 745 million paid subscribers, 160 million more than the company had a year ago, and a fivefold increase on the number of paid subscribers less than five years ago.
What’s more, with the holiday season about to kick off, the company recently announced several new products. These include new AirPods, HomePod Minis, and the “most powerful MacBook Pros ever made,” boasting the new proprietary M1 Processor. “The new products continue to expand the APPL ecosystem and drive increasing demand for software and Apple Services,” Feinseth further noted.
The 5-star analyst anticipates a “very strong” December holiday quarter, during which Apple will “easily” overtake 2020’s record revenue of $111.5 billion.
Lastly, having just announced a 7% quarterly dividend increase and a new $90 billion share repurchase program, AAPL “continues to enhance shareholder returns.”
As such, Feinseth believes “further upside in the shares exists,” and maintains a Strong Buy rating, backed by a $198 price target. Investors are looking at potential upside of 31% from current levels. (To watch Feinseth’s track record, click here)
Feinseth is currently the Street’s most fervent Apple bull, but by no means the only one; of the 27 reviews on record, 21 are to Buy while 6 remains on the sidelines, all resulting in a Strong Buy consensus rating. The average price target is a more modest $170, set to deliver returns of ~14% over the one-year timeframe. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Source: finance.yahoo.com