Think Equity analyst Jonathan Hoopes raised his target price on Apple stock 10 per cent, with a revised $110 target.
The analyst cited strong retail sales and predicted more strength at retail in December. "We believe Apple retail stores will deliver plenty of holiday cheer during the December quarter," he told clients. "The holiday season is set to deliver between $813 million and $916 million of revenues for Apple's retail segment," the analyst predicts.
Hoopes reveals his firm conducted a survey across 28 Apple retail stores across eight US states on November 24 (the day after Thanksgiving, a special shopping day in the US). The day is known as a crossover day in the retail industry, as it's a day that makes or breaks retailers.
The analyst claims to have identified an 8 per cent in-store conversion rate on November 24: for every 100 customers who visited an Apple retail store, eight made a purchase. "We observed healthy demand for MacBooks, iMacs and iPods, accessories and printers," he told clients.
"Based on historical Black Friday (Nov 24) spending patterns, our analysis suggests there is at least $55 million of revenue upside to our retail segment estimate of $1.45 billion. Interestingly, upside could exceed $150 million based on Visa US data that showed 9 per cent dollar-terms growth in the average purchase," he added.
"Never in the history of the PC, has a company been better positioned to both gain share and improve profitability," the analyst writes.