APPLE Inc. - Throwing its hat into the AI ringRecommendation: NEUTRAL (Downgraded); TP US$220, Last close: S$214.24; Analyst Helena Wang
Apple held its annual Worldwide Developers Conference on June 10, where the company introduced Apple Intelligence, its AI framework that supports a range of new features that can be integrated across apps to perform tasks.
It also unveiled updates to iOS 18, iPadOS 18, WatchOS 11, and MacOS 15 (Sequoia).
The new features in Apple Intelligence include major AI-centric upgrades on Siri, AI-powered writing tools, custom AI-generated "Genmoji," and direct access to OpenAI's chatbot.
The OS updates include user-centric enhancements that focus on personalization, security, writing tools, calculation, and device synchronization.
We believe the newly announced features will likely trigger a new round of replacement cycle, as Apple Intelligence is only compatible with the iPhone 15 Pro/Pro Max and iPads and MacBooks with M series chips.
Additionally, improved device synchronization is expected to further increase product demand, as people are more motivated to get a MacBook to pair with their iPhone (or an iPhone to pair with their MacBook) to enjoy the synchronization benefits.
We downgrade to a NEUTRAL rating (from ACCUMULATE) after considering recent share price movements.
We increase our target price to US$220 (prev. US$194.00), a WACC of 6.5%, and a terminal growth rate of 3%. We raise our iPhone unit estimates by 8%, and increased FY24e revenue/PATMI estimates by 5%/3% to account for higher upgrade demand for products.
Source: Phillips
https://www.poems.com.sg/stock-research/AAPL/
Posted: Sat Jun 15, 2024 9:05 pm