Stifel Likes Apple (AAPL) Set-Up Into Late 2016/2017
Stifel analyst Aaron Rakers reiterated a Buy rating and $120 price target on Apple (NASDAQ: AAPL) despite weak Q2 results and outlook.
Rakers commented, "Following Apple’s weak F2Q16 results and F3Q16 outlook (channel inventory burn considered), we are reducing our F2016-F2018 revenue and non-GAAP EPS estimates by an average of 4% and 7%, respectively. Based on a belief investors could consider a current trough non-GAAP EPS (including stock-comp) in the range of $8/sh. and our updated (6% reduced) estimate of $9.42/sh. for C2017, while we see downside into the $90/sh. range (~7.5x ex-cash P/E vs. ~9x median), we maintain our $120/sh. price target (10x ex-cash P/E on C2017 est; ~7x EV/EBITDA). Given our analysis/views on Apple’s iPhone installed base expansion (>625M), we remain positive on the set-up into late-2016 / 2017."
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Shares of Apple closed at $104.35 yesterday.