Why Apple Inc. (AAPL)’s Stock Expected to Climb Higher


In an interview on CNBC’s Fast Money, Gene Munster, Managing Director at Piper Jaffray, discussed Apple Inc. (NASDAQ:AAPL) and why investors are excited about the stock.

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Piper Jaffray rates Apple Inc as ‘Overweight’ with a price target of $105.

According to the investment expert, Apple Inc. (NASDAQ:AAPL) is benefiting from the excitement among investors about the company’s product category. He believes that the stock is likely to head higher because of various positives in the company, which are increasingly becoming clear to investors.

“Investors are not only getting excited about the product category, but also getting more comfortable owning Apple for the fundamentals, which hasn’t been the case in the past couple of years.” Mr. Munster said.

Mr. Munster observed Apple’s move to hire a sales executive from the Swiss luxury products company, Tag Heuer, ahead of the anticipated launch of an Apple iWatch, puts some substance beyond the argument on product category.

Apple Inc. (NASDAQ:AAPL) hired Patrick Pruniaux from Tag Heuer, where he was the vice president of sales and retail. However, his new role at Apple has not been disclosed although the company is known to be readying a wrist wearable known as iWatch to be launched soon. The company is also expected to launch iPhone 6 in the next couple of months.

Underweight calls drop

Mr. Munster mentioned the changing perception among investors concerning Apple Inc. (NASDAQ:AAPL). He said two-third of the calls they received six months ago were ‘Underweight. That reflected about 80%. However, the underweight calls have declined.

“That number has gone down, but it’s still the majority of calls that we are getting are investors that are still ‘underweight’, which makes me believe that there is room to go into some of this product categories,” said Mr. Munster.


Mr. Munster further observed that the most important part in Apple Inc. (NASDAQ:AAPL) is innovation. He said the company needs to have stability around iPhone because that is the core piece. Finally, Mr. Munster added: “For the stock multiple to go up, investors have to believe this is a growth story.”

Disclosure: none