This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Credit Suisse Is Bullish on Apple

NEW YORK ( TheStreet) -- Just a week after Credit Suisse cut its earnings estimates on Apple (AAPL - Get Report), the investment bank reiterated it is still confident in the long-term outlook of the company.

Analyst Kulbinder Garcha hosted a conference call with Apple's CFO Peter Oppenheimer and came away from the call confident, noting "there are several longer term growth drivers that exist for Apple." He reiterated his "overweight" rating and $600 price target.

There has been a lot of concern among the media and on Wall Street that smartphones are becoming a mature market. Last week, Garcha cut iPhone estimates for the second quarter of 2013, now seeing the company selling 30.6 million iPhones, down from his previous estimate of 38.2 million. That was due in part to a mid-2013 iPhone refresh, but also in part to impact from Samsung and other smartphones that have larger screens.

Garcha also cut his full-year 2013 earnings estimates, to $44.92 per share from $47.90, and 2014 earnings estimates, to $54.03 from $58.18 per share.

Those concerns may be overblown, however.

Oppenheimer quoted data from IDC, noting that 45% of smartphones sold are now over $400 and, though the low-end market is growing faster than the high-end, the high-end market is still growing.

There is also the ability for Apple to add new carriers as it moves into new markets. Garcha estimates that Apple can add 65 million iPhone units through carrier expansion alone. Apple has been in talks with China Mobile (CHL), presumably about the iPhone, though nothing has been finalized as of yet.

A deal with China Mobile would continue to play out the China expansion theme, where Apple is now generating a healthy chunk of revenue. The company only has 11 stores in China, but managed to generate $23 billion in annual revenue from the country.

Apple is also moving into Turkey, and is working on increasing its presence in Brazil, Russia and India. Garcha noted the recent efforts to finance Apple products could help spur sales. "New financing terms could make Apple's products more affordable to consumers," Garcha wrote. By addressing additional emerging markets, this could spur an additional $90 billion in revenue and $21 per share in earnings by 2015.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.64 -3.30%
GOOG $691.02 -2.10%
FB $116.73 7.20%
TSLA $249.30 -0.86%
YHOO $36.76 -0.51%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs