Apple Inc. (NASDAQ:AAPL) gearing up for the release of its smartwatch, which has a price range of $349 to $10,000. Many analysts and investors debate on the success of Apple Inc. (NASDAQ:AAPL)’s smartwatch. Among many analysts who remain bullish on Apple Inc. (NASDAQ:AAPL)’s growth, Brian White of Cantor Fitzgerald has increased his price target on Apple Inc. (NASDAQ:AAPL) stock to $180, maintaining a ‘Buy’ rating on the stock. He shared the reasons behind increased price target and the catalysts behind the growth of Apple Inc. (NASDAQ:AAPL) on CNBC.
White pointed out that around a couple of years there were many comments on the table like, Tim Cook is not Steve Jobs, Samsung Electronics is going to destroy Apple, Why doesn’t Apple distribute more cash to shareholders, They are not innovating and so on. He feels that all these comments and questions are coming off the table slowly.
White shares his reasons behind the bullish look on Apple Inc. (NASDAQ:AAPL) stock.
“What we have seen in the past weeks, 1. We have got more details on Apple Watch, so this is a first new category in five years, 2. Apple Car, Apple TV articles out there, 3. China put up the FTD-LTE licenses to give it out, so bigger 4G build up this year and we know iPhone is just killing it around the world. They are doing very well in China. We also have cash distributed more in April. So I think for all of these reasons, does it deserve to trade at such a discount to S&P. I don’t think so,” White said.
White said that looking at 2016 calendar and the cash, which is about 10.5 times for Apple Inc. (NASDAQ:AAPL), whereas S&P is at 16 times. He pointed out that they took S&P multiples and put it on Apple Inc. (NASDAQ:AAPL) and added the net cash, which resulted in their price target of $180. He feels that the price target is very reasonable, since Apple Inc. (NASDAQ:AAPL) has grown 38% EPS in last 5 years compared to 13% EPS growth of S&P.
“Its tough to get your head around a trillion market cap, but I think Apple will be the first company to do it,” White said.
Disclosure: None
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