Goldman Sachs Continues to Have Confidence in Apple (AAPL)
Goldman Sachs remains optimistic on tech giant, Apple Inc.(AAPL) following Tuesday’s conference.
At Tuesday’s tech conference held by Goldman Sachs, Apple’s CEO Tim Cook discussed aspects of AAPL which made many investors gain confidence in the company. Following this conference, Goldman Sachs reiterated its $660 price target and Conviction Buy List rating on Apple. Goldman’s price target suggests a 29% increase from the stock’s current price of $465.84.
Tim Cook said that he believes the company has growth prospects. He commented, “the smartphone market is projected to double in three years and the company believes that all mobile phones will eventually be smartphones. Meanwhile, the company noted that the iPhone is currently only available to 50% of subscribers in the world. In addition, the company continues to view its ecosystem as a key source of competitive differentiation, revealing that it has paid over $8 billion to developers to date.”
Cook also commented on the frustration that many investors have regarding the amount of cash returned to shareholders. He noted that the company is now much more willing to invest in their shareholders.
As for innovation, Cook said that he is very bullshit on innovation for Apple at this point. Although he did not mention any plans for new products, he did say that the company is now much more open to expanding its product line.
A Goldman Sachs analyst commented, “we view the company’s sticky installed base as a baseline for valuation support, and in addition, we expect new products in coming months (including a refreshed iPhone, a new iPad, and a lower cost iPhone) to reinvigorate new user growth. We also believe Apple could move towards shorter product cycles, which would minimize the volatility we saw last year and add a key source of stabilization to the story.”
Apple shares were down -3.78, or -0.81% during Wednesday morning trading. The stock has declined -7.7% in the past year.
The Bottom Line
Shares of Apple Inc.(AAPL) have a 2.28% yield, based on Wednesday morning’s price of $465.84.
Apple Inc.(AAPL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.