Apple (AAPL) Stock Higher, RBC: Gross Margins In Focus for Q3
NEW YORK (TheStreet) -- Shares of Apple (AAPL) - Get Report are increasing 0.62% to $97.58 on Tuesday morning as RBC Capital Markets maintained an "outperform" rating and $115 price target on the stock.
RBC Capital believes the stock should remain stable to modestly higher as iPhone sales declines are beginning to ease and attractive valuation provides support to the name.
Although the firm expects a good third quarter, it has tempered expectations, Barron's reports.
RBC Capital said that while revenues and units should be in line with estimates, it sees potential for more muted gross margin expansion ahead in the company's September quarter and beyond.
"While we see some tailwinds for margins in Sept-qtr, notably a more stable f/x environment, supply chain leverage and less impact from channel inventory adjustments (high-end phones), our concerns stem from the growing mix of iPhone SE at least until we get to the iPhone 7 upgrade cycle (end of Sept and through Dec-qtr)," the firm wrote in an analyst note.
Apple is scheduled to report its 2016 fiscal third quarter results on July 26.
TheStreet's Jim Cramer and Jack Mohr commented on Apple stock in a recent note: "After getting past what has proven to be a historically difficult first half of the year in terms of iPhone 6 sales, we expect the company to benefit from easier year-over-year comparisons in the first half of 2017."
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Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins.
The team believes its strengths outweigh the fact that the company shows weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: AAPL