Piper Jaffray analyst Gene Munster weighed in on Apple on August 13 in light of this speculation, maintaining an Overweight rating on the stock with a price target of $172. The analyst noted, “The timing and features of the new [Apple TV] box are in-line with our previous expectations and the long-awaited streaming content offering still appears a wildcard.” With that said, Munster believes the new streaming service “will likely have limited impact on revenue” even if the product improves “Apple’s position in the living room.”
From a numbers perspective, Munster notes that “every 25 million units would add 1% to CY16 revenue (note ~30 million Apple TVs in product’s lifetime).”
Munster expects the new Apple TV “to incorporate Siri, HomeKit, and possibly an Apple TV app store. Highlighted features could include controlling a connected home, content channels, and getting answers via Siri (like Amazon Echo).” However, the analyst thinks the content offering on Apple TV will be more of an uncertainty. While he expects that Apple “will launch a live streaming video offering,” he believes “there is only a 50% chance it [will happen] at the Fall event.”
Overall, Munster predicts “Apple’s eventual content offering will include the majority of the network channels plus major cable offerings like ESPN, AMC, TNT, and TBS.”
On another note, Munster also weighed in on Apple on August 12, suggesting that the transition from two-year contracts to month-to-month contracts offered by mobile carriers in the United States could result in an eventual tailwind for iPhone sales.
Various U.S. mobile carriers like AT&T and Verizon have transitioned from offering two-year contracts, which offers a subsidy for a new phone, to monthly contracts which do not come with the same subsidy. In the new month-to-month plans, consumers will pay the full price for a new phone in monthly installments.
Munster believes the new month-to-month mobile contracts “could result in a compressed upgrade window for some iPhone users,” but “there may not be one specific quarter where the tailwind is recognized and it may be a more gradual and consistent slight tailwind for multiple quarters until the majority of users transfer to those types of installment plans.”
Overall, Gene Munster has a 65% success rate recommending stocks and a +23.4% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Apple 146 times total since 2009, earning a 71% success rate recommending the stock and a +27.6% average return per recommendation.
Out of 31 analysts polled by TipRanks, 22 analysts are bullish on Apple, 9 are neutral, and 1 is bearish. The average 12-month price target for Apple is $150.24, marking a 30.37% potential upside from where the stock last closed.