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TheStreet Open House

Will Rumors of iPhone 6 Price Increase Help Apple (AAPL) Stock Today?

NEW YORK (TheStreet) -- Analysts are speculating that Apple's (AAPL) latest iPhone iteration will be bigger than ever with a hefty price tag to match.

Alleged body mold and blueprints of the iPhone 6 were leaked online Monday by Chinese microblogging site Weibo. The images show the molds for what has long been rumored to be a 4.6 inch and unprecedented 5.7 inch iPhone 6 screen.

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Peter Misek at Jefferies said "Our checks indicate Apple has started negotiating with carriers on a $100 iPhone 6 price increase."

Deutsche Bank AG  (DB) initiated coverage on Apple shares Thursday with a "buy" rating and a $650 price target.

TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate APPLE INC (AAPL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AAPL's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AAPL's debt-to-equity ratio of 0.13 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 41.65% is the gross profit margin for APPLE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.69% is above that of the industry average.
  • APPLE INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, APPLE INC reported lower earnings of $39.63 versus $44.16 in the prior year. This year, the market expects an improvement in earnings ($42.73 versus $39.63).
  • You can view the full analysis from the report here: AAPL Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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