NEW YORK (TheStreet) -- Well-known Piper Jaffray analyst Gene Munster named Apple (AAPL) - Get Report his top pick for the rest of 2015, replacing Amazon (AMZN) - Get Report . Apple has multiple positive catalysts that should boost the stock, while Amazon;s risk/reward ratio is "balanced" given the huge jump in the stock this year, Munster contended.
APPLE: Apple's stock should benefit from investors' anticipation of strong holiday sales by the company, driven by its launch of new products, the analyst stated. Moreover, U.S. carriers' decision to allow their customers to upgrade their devices more frequently should boost iPhone unit sales by 3% over the next several years, Munster believes. As other countries begin adopting this practice, iPhone unit sales will ultimately get a 5%-7% tailwind from the trend over at least four years, according to Munster. Additionally, the iPhone 7, due to be released in a year, could include major design changes, the analyst believes. Apple may be able to offer the device without a home button, enabling it to provide users with a bigger screen or a smaller device, Munster forecast. Apple could also extend the iPhone's battery life and/or add sapphire to the screen, according to the analyst, who kept a $172 price target and Outperform rating on the shares.
AMAZON: Conversely, the analyst thinks that the near-term risk/reward ratio on Amazon is balanced heading into its third quarter results, which are slated to be reported on October 22. Noting that Amazon's stock has jumped 84% this year, Munster says that "significant expectations are baked into the shares" at current levels. Moreover, excluding the effects of Amazon's Prime Day promotion, unit growth slowed slightly to 20%-21% last quarter, versus 22% in the previous quarter, Munster estimated after conducting checks. Meanwhile, investors' margin expectations for Amazon's quarter ending in December appear to be "realistic," wrote Munster. The analyst, who remains upbeat on the company's longer-term outlook and recommends that longer-term investors overweight the stock, kept a $650 price target on the shares.
WHAT'S NOTABLE: According to research firm Robert W. Baird, Amazon may begin offering logistics and delivery services to other companies. The initiative could increase Amazon's revenue by "billions," estimated Baird. Companies that are currently in the logistics space include FedEx (FDX) - Get Report , UPS (UPS) - Get Report , Echo Global (ECHO) - Get Report , Roadrunner Transportation (RRTS) - Get Report and XPO Logistics (XPO) - Get Report .
PRICE ACTION: In early trading, Apple was fractionally higher at $111.22 and Amazon added 0.3% to $572.34.
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