iPhone 6, new products set to power record Apple profits: Analysts

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By Reuters | Updated: 25 April 2014 10:08 IST
Strong sales of iPhones in China and emerging markets sets the stage for Apple Inc to reap even higher profits after it launches the next iPhone and other new products, analysts said.

At least 15 brokerages raised their price targets on the stock by as much as $60 to a high of $700 after it reported bumper results.

(Also see: With iPhone sales in India doubling, will Apple look at retail for an even bigger push?)

Shares of the company were up 8.5 percent at $569.49 in premarket trading on Thursday.

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Apple's enlarged share buyback, bigger dividend, a larger iPhone 6 and new products would all drive the stock higher, RBC Capital Markets analyst Amit Daryanani said in a note titled "Buy before Tim does it himself".

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On Wednesday, Apple reported sales of 43.7 million iPhones in the quarter ended March 29, far outpacing the 38 million that Wall Street had predicted. Revenue from greater China climbed 13 percent and Japansales rose 26 percent.

Apple approved another $30 billion in share buybacks till the end of 2015 and authorized a rarely seen seven-for-one stock split, addressing calls to share more of its cash hoard while broadening the stock's appeal to individual investors.

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Many Apple observers are betting on another successful product emerging from its secretive labs inCupertino, California in the second half of this year - perhaps an iWatch for users to wear on their wrist. Chief Executive Tim Cook has promised new product categories for 2014.

"We believe the iPhone 6 will prove to be a big hit in China and elsewhere around the world, while the iWatch opens up a new product category for Apple, and we believe the ramp with China Mobile will accelerate in the second half of the year," Cantor Fitzgerald analyst Brian White said in a note.

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© Thomson Reuters 2014

 

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