The Zacks Analyst Blog Highlights: Apple, Roku, Netflix, Intel and Advanced Micro Devices

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For Immediate Release” data-reactid=”18″>For Immediate Release

Chicago, IL – January 15, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple AAPL, Roku ROKU, Netflix NFLX, Intel INTC and Advanced Micro Devices AMD.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Here are highlights from Tuesday’s Analyst Blog: ” data-reactid=”20″>Here are highlights from Tuesday’s Analyst Blog:

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As the New Year winds through its first month, there’s news and views galore on what tech companies are up to. Here’s some of the action-

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U.S. Attorney General William Barr isn’t pleased with Apple because the company is apparently not cooperating with authorities with respect to the Dec. 6 terrorist attack at the Pensacola Naval Air Station base in Florida. Mohammed Saeed Alshamrani, the shooter, had two iPhones and successfully shot at one of the phones and managed to damage the other. While both phones were subsequently retrieved and fixed in the confrontation in which Alshamrani lost his life, they still couldn’t be searched on account of their being password protected.

Then began the usual to-and-fro between the FBI and Apple, with the government agency asking it to create a backdoor and Apple maintaining that a back door could be just as easily used by hackers, etc. and therefore not a desirable thing to have.

Barr said, “We have asked Apple for their help in unlocking the shooters iPhones. So far Apple has not given us any substantive assistance.”

Apple said it has provided information about the shooter’s Apple accounts, iCloud backups and transaction information, running into “many gigabytes” of data to investigators. Moreover, it has provided “all of the information” it has.

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Analyst Tom Forte reiterated his buy rating on Apple shares while raising his price target from $300 to $375.

The analyst gave a number of reasons for his continued optimism, the primary of which was the 5G wireless upgrade cycle and Apple’s own handset launch in Fall 2020 that he expects will drive iPhone sales over the next two years.

Additionally, since the telecom upgrade by wireless carriers is increasing carrier costs on both the spectrum auction and the infrastructure buildout, they will be eager to drive sales through any means including “greater incentives to consumers to upgrade their devices and leverage their 5G networks.”  This will help Apple.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With $79 billion remaining on its current stock repurchase authorization, the possibility for increased share buybacks remains according to the analyst.
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And finally, the Apple Card credit card and other emerging businesses like AppleCare, iCloud, Apple Music, Apple TV+ and Apple Arcade that will grow in line with the growth in the installed base, will remain a strong driver.” data-reactid=”32″>With $79 billion remaining on its current stock repurchase authorization, the possibility for increased share buybacks remains according to the analyst.
 
And finally, the Apple Card credit card and other emerging businesses like AppleCare, iCloud, Apple Music, Apple TV+ and Apple Arcade that will grow in line with the growth in the installed base, will remain a strong driver.

It’s interesting that wearables aren’t mentioned, especially since Apple is a leading player here.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Needham Roots for Roku, JP Morgan Thumbs Up to Netflix” data-reactid=”34″>Needham Roots for Roku, JP Morgan Thumbs Up to Netflix

The Needham team led by analyst Lara Martin is raising Roku’s active account estimates for the end of 2019, as they expect positive impact from Disney+ adoption. They also expect the company to benefit from increased ad spending from Netflix, Apple and others as the “DTC Customer Acquisition War” heats up.

Last week, J.P. Morgan turned bullish on Netflix subscribers: “Net-net, we come away with increased confidence in Netflix’s multi-year international growth potential, and we are raising our longer term global paid streaming subscriber estimates… We now project 300 (million) global streaming subs in 2024.”

Both analysts were commenting on CES takeaways.

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Fourth quarter and 2019 PC shipment estimates from both Gartner and IDC are encouraging. It appears that the market has grown for the first time in years with the fourth quarter being particularly strong.

The main driver of this growth has been the end of life for Windows 7 that prompted many enterprises to upgrade to Windows 10 devices. Component shortages created difficulties but what Intel couldn’t deliver, Advanced Micro Devices made up in some cases.

The next twelve to eighteen months are however expected to be challenging as Windows 10 driven updates are more or less over while component concerns remain. A trade deal is also not done yet. On the positive side, there could be some momentum from 5G, dual and folding screen devices and gaming PCs in the back half.