Will Apple (AAPL) Stock Be Helped by iPad Pro Sales?

Apple's (AAPL) new, bigger iPad is available to order online starting today, and will arrive in stores later this week.
By Rachel Graf ,

NEW YORK (TheStreet) -- Apple's (AAPL) - Get Report new iPad Pro is available for online order beginning today, and will arrive in stores later this week. 

The company hopes that its most recent and largest iPad will revive sluggish sales of the tablet, the Wall Street Journal reports. For the three months ended September 26, iPad sales fell by 20% in both units and revenue, to mark the seventh consecutive quarter of declines. 

Apple is targeting business customers with its most recent iPad, which it hopes will rival Microsoft's (MSFT) Surface Pro 3.

Sales to businesses will likely contribute up to 20% of the overall tablet market by 2018, up from 14% this year, according to research firm Forrester, Reuters reports. The tablet market is expected to expand to 250 million units from 218 million units during that time frame. 

The iPad Pro's price starts at $799, and will be available in more than 40 countries. 

Additionally, on Tuesday shares of Apple tumbled after Credit Suisse announced that the iPhone maker cut up to 10% of its hardware component orders. Credit Suisse also lowered its forecast for iPhones in fiscal 2016 to 222 million from 242 million. 

Apple stock is down by 0.77% to $115.87 in late morning trading on Wednesday. 

Separately, 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 solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. 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:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • 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 ($9.91 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.
  • 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.

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