Apple Inc. Hits Its Next “Super Cycle”: Analyst

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Apple Inc. Hits Its Next “Super Cycle”: Analyst
ElisaRiva / Pixabay

Apple Inc. NASDAQ:AAPL’s price to earnings multiple could expand as it kicks off the new product cycle, according to analysts at Cantor Fitzgerald. They call this year’s cycle another “super cycle” and likened it to the 2001 product cycle in which the iPod was introduced, the 2007 cycle which brought the iPhone to market, and the 2010 cycle in which Apple released the iPad.

Play Quizzes 4

Did investors take profits in Apple?

In a report dated Sept. 15, 2014, analysts Brian White and Isabel Zhu said many investors seemed to be taking profits heading into Apple’s event last week. They think that view is shortsighted, however, and may end up being “costly” because they think this year’s product cycle is another “super cycle” and note that it extends into next year because the Apple Watch won’t be up for sale until then

They say consumers’ appetite for the iPhone 6 Plus appears “insatiable,” as preorder shipment times continue to extend. They think the Apple Watch will be a “home run” and garner record first-year unit sales volume for the company. They also believe it will provide Apple with a foothold in what they expect to be a large wearable technology market.

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The analysts don’t think Apple is done with entering new product categories. They also think that the company’s expertise in designing products and services that work together will end up being “invaluable.”

Apple’s P/E multiple may expand

The Cantor Fitzgerald team notes that Apple’s price to earnings multiple has contracted by more than 50% compared to the S&P 500 Index. They think that might change though, and they maintain their Buy rating and $123 per share price target on the company.

They believe that last week’s product unveilings offer Apple an even more diversified revenue base while also improving the stickiness of its ecosystem and providing a “stronger platform for accelerated momentum for new product categories going forward.

The analysts also think investor concerns about competition, a lack of innovation, a narrow portfolio, CEO Tim Cook’s leadership and a disregard for shareholders are “exaggerated.”

Shares of Apple slumped by as much as 1% in morning trading today.

 

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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17 COMMENTS

  1. After the abuse you’ve given AAPL in every forum at every opportunity for the last few months, I don’t think anyone here believes you ever owned a single AAPL share.

    BBRY maybe…

  2. So, you’d think that after just announcing record preorders for the iPhone 6, Apple’s shares would be surging to new highs, right? Actually, no — Apple shares are falling on Tuesday morning and the biggest reason why is that new reports out of China indicate that the world’s largest mobile carrier might not even launch theiPhone 6 this year.

    RELATED: Apple announces record-smashing iPhone 6 preorders: 4 million in just 24 ..hours

    Bloomberg brings us word that China Mobile “will focus on selling cheaper phones that don’t require subsidies as the world’s largest carrier said it doesn’t know when Apple’s iPhone 6 will be available in the nation.” The decision to push cheaper phones to customers comes as China Mobile is looking to cut $2 billion in subsidy costs it pays for high-end smartphones from Apple and Samsung.

    Just how much more expensive is the iPhone in China compared to other 4G phones? According to Bloomberg, China Mobile is selling the iPhone 5s for 5,288 yuan with a contract, whereas a new 4G-capable phone from Huawei costs 1,199 yuan without a contract.

    Given that China Mobile has nearly 800 million subscribers, news that the device might not launch on the carrier this year would obviously have a big impact on Apple’s holiday quarter iPhone sales. Because of this, Apple shares fell by more than 1.7% in pre-market trading and immediately dropped by 1.4% once trading officially started on

  3. you are probably one of the biggest idiots to ever comment. STFU you moron amateur investor. You and the rest of the fools who follow you believe apple is a 1 SKU company. They literally have more money as cash to buy a bank if they felt to do so. They have enough money to lend to the US government if they wanted. They have signed deals with IBM (they can buy IBM in a blink if they wanted), they have made deals with major retail outlets including mcdonalds, bloomingdales, macys etc and will charge 15 cents on every transaction over $100 with apple Pay. The watch has numerous other industrial applications, its a new communication device. In the healthcare field (which i work in) it will be used with the elderly to monitor vitals and give live streaming data to first aid responders. Most doctors will get this watch so they can stop pulling their phones out during consultations to see who is calling. Get your head out of your ass and actually study apples business.

  4. apple crapple loosing 20 percent of its rev in china as china mobile pushes its own iphone in and apple crapple out sell sell sell before its too late APPLE GOING TO TANk

  5. Apple’s IPhone 6 May Miss China Shelves This Year, Shares Fall

    By Jennifer BootonPublished September 16, 2014MarketWatch Pulse

    Apple’s shares slumped 2% to $99.67 in early Tuesday trade after reports emerged that the new iPhone 6 may not hit store shelves in China this year. The China-based newspaper 21st Century Business Herald, citing a source close to the company, said that Apple failed to reach an agreement with the country’s Ministry of Industry and Information Technology this month, which might push back an agreement until next year. Apple did not immediately respond to MarketWatch for a comment. Elsewhere, other reports indicated that Apple’s near-field communication technology will be exclusive to Apple Pay for at least a year, making the chip temporarily unavailable to developers for use in third-party apps

  6. So, you’d think that after just announcing record preorders for the iPhone 6, Apple’s shares would be surging to new highs, right? Actually, no — Apple shares are falling on Tuesday morning and the biggest reason why is that new reports out of China indicate that the world’s largest mobile carrier might not even launch theiPhone 6 this year.

    RELATED: Apple announces record-smashing iPhone 6 preorders: 4 million in just 24 hours

    Bloomberg brings us word that China Mobile “will focus on selling cheaper phones that don’t require subsidies as the world’s largest carrier said it doesn’t know when Apple’s iPhone 6 will be available in the nation.” The decision to push cheaper phones to customers comes as China Mobile is looking to cut $2 billion in subsidy costs it pays for high-end smartphones from Apple and Samsung.

    Just how much more expensive is the iPhone in China compared to other 4G phones? According to Bloomberg, China Mobile is selling the iPhone 5s for 5,288 yuan with a contract, whereas a new 4G-capable phone from Huawei costs 1,199 yuan without a contract.

    Given that China Mobile has nearly 800 million subscribers, news that the device might not launch on the carrier this year would obviously have a big impact on Apple’s holiday quarter iPhone sales. Because of this, Apple shares fell by more than 1.7% in pre-market trading and immediately dropped by 1.4% once trading officially started on

  7. stop flooding the market with your Junk APPLE CRAPPLE your iphones same as last years ur watch is a piece of junk
    ur icloud got hacked im sure apple pay will get hacked ur finger print scanner easily hacked
    ur new junk is over priced and useless

  8. you mean appl crapple is ALL WASHED UP

    Asian markets slipped on Wednesday following a slide on Wall Street, with Tokyo hurt by a pick-up in the yen, while Apple (NasdaqGS: AAPL – news) suppliers turned lower as investors were left unimpressed with the US giant’s latest iPhone and watch

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