Wednesday, April 1, 2015

Opinion: analysts underestimated Apple, the company will be even more costly

Apple is preparing to publish a quarterly report. Financial results will be announced on April 27 , and most self-respecting analysts have made ​​forecasts for earnings and sales. However, the expert Citi maintains that his colleagues on the shop floor underestimate Apple.

Citi representatives Jim Suva led a strong case in favor of the report Apple has once again will be even more successful than predicted by analysts. "The result will exceed expectations for revenue of at least $ 1 billion, while the supply of iPhone - 5%; total earnings per share will be better than 2%, when compared to all of this with the consensus forecast. Even those 6%, which is supposed to be lost due to the strengthening of the dollar does not change the situation" - quoted expert Vestifinance .
Previously, he was voiced by radical forecast shares Apple. His was an analyst at Cantor Fitzgerald Brian White. He claims that Apple market capitalization reached $ 1 trillion. Today, he told his clients that the securities will rise up to $ 180. The previous forecast was already positive - $ 160. If we are really going to go to $ 180, then in fact Apple will cost even more than $ 1 trillion. At the moment, Apple's capitalization is $ 724 billion, the shares for this moment cheaper by 0.23% and cost a little more than $ 123 apiece.
Is the most valuable company in the world by market capitalization really underestimate?Let's see what arguments lead analysts Citi.

1. People will be more likely to change smartphones

Jim Suva asserts that the life of smartphones is reduced. And it's not in the acceleration of technological development, and certainly not to reduce the quality supplied to the market devices. Simply, many mobile operators have changed the system of sale of phones with a contract, and it concerns precisely iPhone. Trade-in program is now possible not to wait two years before buying the updated model, if the contract is not yet closed.

2. Apple "less" market

Despite all the achievements, Apple still stands on the stock exchange less than many other players. In general, the S & P 500 ratio of capitalization and revenue forecast quite different: on average, companies are 17 times more expensive than able to sell goods. Business iPhone maker is worth only 14 times more expensive than its expected revenues. This unusual ratio P / E should eventually change. And the next report could be that a certain point, after which Apple will start to go up.

3. Increased margin due to memory the new iPhone

In Citi believe that their colleagues lay in the forecasts a new approach to the formation of a complete set of Apple iPhone. The latest generation of "apple" smartphone is sold with a storage capacity of 16, 64 and 128 GB. The increase in this amount of costs only $ 20, you have an iPhone with 128 gigabytes worth only $ 40 more expensive than most "empty". But buyers for each step increase memory pay $ 100. This means that at least $ 80 on Apple earns a "clean".

4. Apple Pay and Passbook

Potential payment system and applications for the Apple store credit cards and other important things have not yet been discovered. Apple Pay was introduced in October, and gradually joined it more and more retailers. Despite the criticism of the system and competition, including with main rival - Samsung, Apple POS terminals will help to generate more revenue. As for the Passbook, where you can keep not only credit cards, but also, for example, tickets, then after leaving Apple Pay the application gets a second life, and in the future may be new ways to monetize Passbook.

5. Exit the corporate market

Apple is one step from the expansion of the corporate market. Expert reiterates the company's contract with IBM, which has already developed programs for business. Although Suva does not forecast the release date of iPad Pro / Plus, he points to the fact that the current Apple CEO Tim Cook is much more interested in corporate customers than its predecessor, Steve Jobs. Wide, the market is not yet confident in the ability of the company from Cupertino to win this segment and lays the potential positive in the share price.

6. Apple Watch

By the end of the fiscal year, Apple will sell 7 million Apple Watch, an analyst at Citi. This, of course, not so much, but a positive effect for businesses will be long-term, he said. Recall that, according to Brian White of Cantor Fitzgerald, sales of Apple Watch at the end of the fiscal year reached 25.1 million. At the same time, analysts KGI Research cite the following figures: "smart" watches will be sold and disperse a circulation of 2.8 million pieces for each month of sales. It is also reported that the supply of certain key components of the Apple limited, which slows down the final assembly and delivery devices.

7. Promotion of shareholders

Apple demonstrates our commitment to support the shareholders through dividends and buy-back programs. Programs to encourage shareholders Apple may be financed by huge pillows cache of $ 178 billion and additional loans. Last year, the company has already appeared on the market in order to attract additional funding for such programs.Repurchases and dividend capacity can be used as an anti-crisis mechanism in the event of a sharp change of trend in the market, and as an added incentive to grow.