Apple: shares should re-rate, Jefferies says
(CercleFinance.com) - Jefferies maintains its "buy" rating on the Apple stock, saying that the share should re-rate.
In a note to clients, the US broker said the technology giant will tell a "compelling" story for its service business when it discloses gross margin for the first time ever on its next earnings announcement.
Its findings suggest services have a gross margin of between 60% and 66% - above the consensus of 56%.
Apple will report its first-quarter results at the end of January.
Jefferies also thinks that Apple's valuation is attractive, currently trading at a P/E of about 12.5x, cheaper than Dell (16.3x), the S&P (14.5x) and the Nasdaq index (18.7x).
However, the broker has cut its target price from 265 dollars to 225 dollars, although this still implies 35% upside from its current level.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
In a note to clients, the US broker said the technology giant will tell a "compelling" story for its service business when it discloses gross margin for the first time ever on its next earnings announcement.
Its findings suggest services have a gross margin of between 60% and 66% - above the consensus of 56%.
Apple will report its first-quarter results at the end of January.
Jefferies also thinks that Apple's valuation is attractive, currently trading at a P/E of about 12.5x, cheaper than Dell (16.3x), the S&P (14.5x) and the Nasdaq index (18.7x).
However, the broker has cut its target price from 265 dollars to 225 dollars, although this still implies 35% upside from its current level.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.