More Squawk From Jim Cramer: Apple (AAPL) Stock Upgrade 'Genuine, Homespun Reason'
NEW YORK (TheStreet) -- Apple (AAPL) - Get Report stock is advancing 2.90% to $116.99 this morning, after Goldman Sachs added the stock to its "conviction buy" list and noted that Apple's business model and loyal customers provide an opportunity for it to become more of a services company.
"Finally, an intellectual analysis done by someone," TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning.
There has been a lot of discussion about the iPhone-maker's supply line, Cramer noted. Last week, the stock declined after Credit Suissesaid in a note that Apple had cut up to 10% of its hardware component orders.
"That's nonsense," Cramer said.
The Goldman Sachs analysis argues that Apple should be viewed not just as a device company but rather as a services company, which Cramer thinks is against the grain "in a good way."
"This is actual thinking - it involves the frontal lobe, the cerebral cortex - this is actual research and thought," Cramer added. "It's not just, 'I checked in with five guys and they're not buying a lot of parts.'"
In other analyst actions this morning, GoPro's (GPRO) price target was cut to $15 from $20 at Piper Jaffray, which Cramer said was "absolutely fabulous research."
"The GoPro product looks like a bust for the holidays," he added. "That's what happens when you have these fads."
Cramer said GoPro stock's decline is still in its early stages.
Separately, TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, notable return on equity and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- APPLE INC has improved earnings per share by 38.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, APPLE INC increased its bottom line by earning $9.20 versus $6.43 in the prior year. This year, the market expects an improvement in earnings ($9.89 versus $9.20).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 31.4% when compared to the same quarter one year prior, rising from $8,467.00 million to $11,124.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 25.6%. Since the same quarter one year prior, revenues rose by 22.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 45.95% 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 21.59% is above that of the industry average.
- You can view the full analysis from the report here: AAPL
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.