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The Two Catalysts That Will Drive Apple Inc. (AAPL) Growth In First Half Of 2015

Apple Inc. (NASDAQ:AAPL) had just completed a very successful 2014, with a very successful launch of iPhone 6 and 6 Plus. Apple Inc. (NASDAQ:AAPL) registered a 30% earnings growth in 2014, and some expectations say that they will be able to grow the earnings by 20% in 2015, which is huge. BTIG Analyst Walter Piecyk talked on CNBC about Apple Inc. (NASDAQ:AAPL)’s earnings outlook in 2015.

Apple Inc. (AAPL), Inc. (AMZN), Barnes & Noble Inc. (BKS)

Apple Inc. (NASDAQ:AAPL) 2015 earnings and performance depends most on the success of Apple Watch. Piecyk feels that Apple Inc. (NASDAQ:AAPL) stock trading at a 14 multiple, when the market is trading at a 17 multiple and the company growing earnings at 20% is very attractive.

“The stock trading at 14 multiple, the market is at 17 multiple and they are growing earning at 20%. I mean, it seems not too long ago that we were talking about negative earnings growth, we went to 30% earnings growth last year and now you are talking about a major company generating $200 billion of revenue and able to grow earnings by 20%. That seems like an attractive stock to buy at a 14 multiple,” Piecyk said.

Piecyk feels that the post iPhone performance of Apple Inc. (NASDAQ:AAPL) was below the trend. He pointed out that the stock fell by more than 10% towards the end of 2014. He said that post iPhone launches for previous versions, the stock prices went up by more than 20% – 30%, but post iPhone 6 launch the stock price went up by just more than 10%, which he thinks is very less.

Piecyk pointed at some people’s argument that below trend performance might be due to the valuation discount. He thinks that it might not be true. He talked about Verizon Communications Inc (NYSE:VZ)’s upgrade rate announcement and T-Mobile’s report about strong subscriber growth, which shows that iPhone sales might roll into the March quarter as well.

Due to the 10% downward movement in December, the company had lost close to $70 billion, which is very big. Piecyk mentioned that for tech companies like Apple Inc. (NASDAQ:AAPL), there should always be a catalyst for growth. He feels that other that March quarter earnings report, one important catalyst for Apple is the launch of Apple Watch.

Piecyk said that this is the first product category launch by Tim Cook and iPhone 6 was just an upgrade to already available product category. He strongly believes that Apple Watch success is going to determine the stock growth in 2015. He said that their estimates are close to 5 million units sales, which results in $2.5 billion revenues.

Disclosure: None

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