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(Bloomberg) – Apple investors are probably waiting for the company to use its huge cash to make acquisitions. Netflix, Activision Blizzard and Sonos are some of the companies that JPMorgan considers the most strategically appropriate.
Apple's shares fell nearly 30% from an October record due to concerns over demand for the iPhone, its flagship product line.
In its latest quarterly report, Apple's first decline in sales from one quarter to the next since 2001, a decline that is almost entirely due to the decline in smartphone sales.
Because of this environment, and considering the fact that Apple has about 130 USD. billions of dollars in cash flow generated each year after dividends – investors probably expect that Apple "uses the strength of its balance sheet to isolate the scenario of technology," wrote badyst Samik Chatterjee. JPMorgan is overweight Apple stocks with a price target of $ 228.
Chatterjee noted that the prospect of such transactions was hypothetical and theoretical. Apple did not immediately return a comment request, unlike Netflix, Activision, and Sonos.
According to JPMorgan, video games, video content and smart speakers are among the "most strategic value" sectors for Apple, "because they offer potential growth opportunities by leveraging services on an installed base more extensive ".
Netflix was considered "the best strategic choice" for Apple in the "content" category, "but we believe that a combination is less likely, as Netflix would probably not be sold for a modest premium." Giant streaming video has a market value of $ 148.4 billion.
Video content provides "a lever for the rapid growth of content consumption on mobile devices" and Netflix has "a consolidated platform Chatterjee has written to its customers to accelerate the initial investments of Apple in original content
The loudspeaker category "emphasizes a strong commitment to customers" and offers "synergies to boost Apple Music services."
Apple " is currently lagging behind its competitors in the category of smart homes, "JPMorgan wrote in reference to the company's HomePod product line, while Sonos occupies" a differentiated position as a premium home sound system compared to Amazon Alexa and Google Home ", as well as a" strong customer loyalty and a strong international presence. "
Sonos had a market value of $ 1.2 billion at the end of selling di.
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