Apple: Moving targets

Watch the analysts change their tune.

Several Apple analysts used Tuesday's results as an opportunity to fine-tune their 12-month price targets. Among the ones I've seen:

  • 5 raised their targets
  • 3 lowered their targets
  • 9 stayed pat

Most of the changes were small.

Not seeing the interactive graphic? Try the website.

The outlier here is BCG's Colin Gillis at $85 a share. He actually cut his price target on Monday, the day before the earnings report, and advised his clients to sell. The next day, the stock popped and he penned this post-earnings haiku:

While the stock is up,
the underlying metrics,
are all in decline.

For the record, Gillis is the only sell-side analyst on the street with a "sell" rating on Apple, and the only analyst with a price target that's underwater.

Here's my complete list of published targets, as accurate and up-to-date as I can make it. Corrections appreciated.

Screen Shot 2016-07-28 at 9.30.58 AM

Click to download and enlarge. 

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  1. Fred Stein said:
    Over the last few years, I’ve seen two patterns with analyst targets and AAPL’s price.
    1) AAPL trades at about a 10% to 30% discount to targets.
    2) Analyst targets move up or down AFTER the AAPL moves up or down.

    July 28, 2016
    • Robert Paul Leitao said:

      In general, the wider the gap between the current trading price and analyst price targets the stronger the buy recommendations.

      Apple’s new narrative on Services which debuted with March quarter results creates a compelling growth story. The June quarter numbers did surprise the Street against what were low expectations. I’d like to see price targets rise above $130 per share.

      Apple has opportunities over the next three months, inclusive of the release of the next flagship iPhone handsets and the release of September quarter results, to demonstrate not only the resilience of the iPhone product line but also Services as the emerging growth story is an outcome not only of Apple Music subscriptions but also greater eco-system engagement by an expanding universe of users. If management continues to effectively deliver on its new narrative, I expect price targets to rise significantly above current levels.

      July 29, 2016
      • Fred Stein said:
        Agree. One implication of the high growth services revenue is that Apple can sell lower priced and lower margin devices to gain share. This dramatically improves long term revenue and profitability.

        July 29, 2016
        • Robert Paul Leitao said:

          Moving away from a valuation of Apple based on unit sales to an understanding of growth through the acquisition of new customers and rising revenue, on average, per customer will reveal more of the company’s value.

          Consider the big hit to revenue and margin from the dollar’s high value. As the dollar’s value gradually softens, the concerns over margin will diminish. Apple’s ability to sustain high margin during this currency episode is actually quite remarkable.

          July 29, 2016

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