“Outperform” is the rating that analyst Tavis McCourt, from Raymond James, gives to Apple Inc.’s (NASDAQ:AAPL) shares during the 3rd quarter of fiscal year 2014. Mr. McCourt’s positive predictions, which call for a robust rise in stock values up to the release of the iPhone 6 and some measure of retrenchment afterward, are based heavily on the likely popularity of the large screen iPhone 6 that nearly every tech watcher agrees is nearing its launch date.
Investors are still in an adjustment phase following Apple’s long awaited seven-way stock split, which increased share numbers sevenfold while slashing individual prices to under $100 apiece. Mr. McCourt notes that his current price target for the Cupertino company’s stock is $102 per share, a considerably higher level than his previous target of $86 per share. He then went on to justify his target with a brief analysis of Apple’s near future prospects.
One of the analyst’s most significant remarks was that Apple Inc. (AAPL) has created a sustainable niche for itself, in which the company is likely to continue reaping margins superior to the average. He attributes this success to Apple’s development of a thoroughly integrated ecosystem that makes multiple products equally appealing to the same user, and the well-developed synergy between hardware, software, and services.
Mr. McCourt further states that a high quality mobile payments system will likely cement Apple’s reputation among investors, should such a system be implemented in the near future. These remarks highlight the real strength of Steve Jobs’ company – a well-developed, smoothly integrated multifunctional ecosystem using a unified set of reliable platforms. This, more than any specific gadget, has become Apple’s core advantage.
Of course, specific items are still vitally important to Apple, even if they are mainly serving as gateways into the larger whole. Mr. McCourt also observes the likelihood that larger iPhone 6 screens will drive additional profits through upgrade sales. The largest screen, he believes, may command a premium of $100 extra per smartphone, while the intermediate sizes 4.7 inch screen may cost little more than a standard sized iPhone.
Detailed and based on surveys rather than hype, the analyst’s predictions seem to indicate a solid future for Apple Inc. (AAPL) in both the short term (with iPhone 6 sales providing better than average revenue into 2015) and the long term (the creation of a stable, high value product and service ecosystem generating exceptional profits into the foreseeable future).
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