Bank of America Busy with Apple (AAPL), Hibbett Sports (HIBB)

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Apple Inc. (AAPL) closed at $99.62 on Monday, once again disappointing investors who are hoping shares will capsize and stick over $100.

Hibbett SportsWhile there may not have been much action on Wall Street yesterday, Bank of America made some waves by reinstating coverage on AAPL with a $120 price target and buy rating.

Benzinga shared the reason for Bank of America feeling strongly about the near-term future of Cupertino:

“We rate Apple Buy on: 1) strong iPhone product cycle 2) development of new revenue sources like Apple Pay, Apple watch, home/health kit etc, and 3) optionality provided by a significant cash balance that can help accelerate innovation into new markets.”

On the surface, this makes sense. Digging deeper, however, concerns remain. For example, who is to say Apple Pay will turn into a revenue powerhouse? And what will happen if Apple Watch sales are lower than expected?

Bank of America and Deutsche Bank have different outlooks on the company, with the latter recently downgrading Apple from “buy” to “hold.”

More Bad News for Hibbett Sports

Hibbett Sports, Inc. (HIBB) has not been loving life lately. Most recently, Bank of America analyst Rafe Jadrosich jumped in line with many others, including Piper Jaffray and BMO Capital, and downgraded the company from “buy” to “neutral” Furthermore, its price target was lowered to $47 from $55.

Bank of America explained its position:

“We are downgrading Hibbett Sports to Neutral (from Buy) and lowering our price objective to $47 (from $55) given a more conservative industry same-store sales outlook coupled with HIBB’s expected step-up in expenses next year, which should pressure EPS growth. Our PO is supported by 16-17x our new F2016E EPS of $2.90 (was $3.00), a slight discount to its historical range of 17-18x.”

HIBB continues to fight through a terrible 2014, with shares falling more than 35% since the start of the year.

As of this writing, Chris Bibey did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/bank-of-america-aapl-hibb/.

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