Apple Inc. (NASDAQ:AAPL) shares have given a return of 37.4% (dividends reinvested) in comparison to total return of the S&P index of 13.6% (dividends reinvested), since the upgrade by BGC on April 22, 2013. Analyst Colin W. Gillis at BGC reported few positive factors that “already occurred” or added to the growth of Apple stock.
The analyst also notes, “While we nudge our estimates and price target slightly higher, we do see fewer positive catalysts for the stock as the company finishes its annual product line refresh.”
Growth catalysts for Apple “already occurred”
Apple Inc. (NASDAQ:AAPL) announced a higher capital program of $100 billion under which it will increase its dividend by 15% along with increasing the share repurchase authorization to $60 billion. In its June quarter, the company utilized $16 billion on share repurchase activity, setting an aggressive repurchase pace.
Apple Inc. (NASDAQ:AAPL)’s new iOS7 was launched in a developer’s conference in June. The Cupertino-based company also launched new lines of iPhones, iPads and Macintosh computers in September and October. Also, Apple achieved $9 million in sales of its new iPhone just three days after the launch, which fueled the total revenue and gross margin for the September quarter to the near high end of its previously provided guidance. With such impressive sales numbers, analysts believe that the iPhone maker has entered into its historically strong holiday quarter.
Apple Inc. (NASDAQ:AAPL) announced in an event that it sold its 170 millionth iPad earlier this year. However, it indicated that sales in the September quarter will be less than 15 million units.
Potential catalysts remaining
Apart from the aforementioned growth drivers, some other important ones that still remain are entering into a deal with China Mobile to sell iPhones and a possible margin cycle expansion just like when it expanded during the launch of the iPhone 4S, which was a refreshed version of the iPhone 4.
Estimates for September quarter
The BGC analyst expects revenue for the September quarter to come in at $36.9 billion, which is a rise of 2.7% year on year and 4.6% sequentially. The consensus revenue estimate is $36.7 billion. Earnings per share are expected to be $7.92 versus $8.67 in the previous year and $7.47 in the prior quarter and consensus estimates of $7.90.
For the quarter, the analyst expects sales around 32.5 million iPhones with an average selling price of $590 adding 52% to the revenue. Unit volumes are expected to rise 20% year on year and 4% sequentially. Analysts estimate a total of 14.5 million iPads will be sold with an average selling price of $435 for 17.1% of total revenue.
BGC analyst has assigned a Buy rating to Apple Inc. (NASDAQ:AAPL) with a price target of $527.02.