Why Apple Has Become a 'Bellwhether' for 2014
NEW YORK ( TheStreet) –– Apple
Barclays analyst Ben Reitzes upgraded shares, giving them a $110 price target, stating that his belief in Apple CEO Timothy D. Cook has returned, as Cook has "solidified his strategy and re-gained the confidence of Apple stakeholders in many ways -- reversing many of the warning signs we saw earlier in the year." He also noted that Samsung's recent weakness provides a buffer for Apple, and the pipeline into 2015 is so strong, that Reitzes and his team are "compelled to get on board even if its midway through the rebound trade."
Reitzes raised his June quarter estimates ahead of fiscal third-quarter earnings, as he believes the iPhone is likely to continue staying strong, following the massive iPhone number (47.3 million units shipped) last quarter. He expects Apple to earn $1.24 a share on $38.33 billion in revenue, with 37 million iPhone unit shipped for the quarter. He also raised fiscal 2014 iPhone unit sales to 172 million, and bumped fiscal 2015 iPhone unit sales to 197 million, including 61.5 million in the December quarter.
Analysts surveyed by Thomson Reuters expect Apple to earn $1.22 per share on $37.87 billion in revenue, when it reports earnings July 23.
Shares of Apple were higher in early Monday trading, gaining 0.77% to $95.95.
Reitzes has compared Apple to Google's
Aside from potentially stronger-than-expected earnings, Apple has a lot going for it, including a slew of new products and categories the company is looking to enter. Reitzes believes an Apple-branded smartwatch, dubbed the iWatch, could be launched later this year, with Nike
In addition to the iWatch, an integration of mobile payments would be Apple's next big area of opportunity, leveraging the 800 million iTunes accounts and credit card information. On Apple's fiscal first-quarter earnings call, Cook mentioned that mobile payments is an area of intrigue for Apple, mentioning Touch ID, the company's finger-print technology in conjunction with it. "The mobile payments area in general is one that we've been intrigued with, and that was one of the thoughts behind Touch ID," Cook said on the earnings call.