Apple Inc. (NASDAQ:AAPL) will likely soar after it launches iPhone 6 in the next few weeks, according to Steven Milunovich, managing director at UBS, who talked on CNBC’s “Squawk Alley”. The stock recently breached the $100 a share mark and touched a new high of about $102 today as investors continue to bet positively on the stock, especially in anticipation of the iPhone 6 release. The company is expected to launch the refreshed iPhone line on September 9, and it will be available in the stores about a week and a half later.
Milunovich tied the excitement in Apple Inc. (NASDAQ:AAPL) to the upcoming iPhone 6, but also talked about what is likely to happen after current tide in the stock. He recalled that looking back about 2 years ago Apple did not come through as was expected. He cited a decline in margins and other issues that impacted the stock. However, he was quick to note that this time around things are different, or at least better.
Apple Inc. (NASDAQ:AAPL) is expected to launch iPhone devices with larger display-screen. In fact, the company is expected to release two version of the refreshed iPhone, which feature 4.7-inch and 5.5-inch wide display-screens.
“[…] We think gross margins are likely to hold up. We are also getting a below the market multiple, which was not the case two years ago; 2% dividend yield, they are buying back 5% to 6% of the stock. You get Apple moving out more broadly, what we call Apple-sphere […],” stated Milunovich.
Milunovich mentioned that a third of the market that Apple Inc. (NASDAQ:AAPL) has not played yet in is the larger screen phone segment and the company is expected to address that in the upcoming iPhone 6. As concerns Apple’s pipeline, he also talked about the company having a wearable device, which is expected to expand its product ecosystems and further drive up the stock.
“The phone is still the main event. It is interesting to see the stock hit its high in 2012, right about the day when Apple said they had fantastic first-day sales and so forth. That’s great, but you got to have sustainability […],” said Milunovich.
They have Apple Inc. (NASDAQ:AAPL) rated a “Buy” at UBS with a target price of $115 a share.
Notorious billionaire investor Carl Icahn is among the largest shareholders of Apple Inc. (NASDAQ:AAPL), owning over 52.7 million shares of the company so far.