Apple Jumps On Upgrade To "Strong Buy" From Raymond James

Michael Teague  |

Apple’s (AAPL) beleaguered stock got a lift on Monday, jumping over 3.5 percent to $411.54 in midday trading on news that the company filed in Japan for a trademark for “iWatch”, as well as getting a generous upgrade from the financial advisory firm Raymond James.

Though no official date of confirmation of the patent request has been provided, the Japan Patent Office indicated on its website that the application was submitted in early June. The news is significant because it seems to confirm the many rumors that so-called wearable technology is the market in which Apple plans to introduce its next and much anticipated new and potentially game-changing product.

On the same day, Raymond James analyst Tavis McCourt upgraded the company’s stock to a “strong buy,” after revising estimates for iPhone shipments upwards by 1 million for the June period, and citing “horrible” sentiment, particularly among institutional investors, creating a situation in which Apple is set to outperform.

CEO Tim Cook has recently made promises of new products to come by the end of the year, and the company’s direction in terms of innovation is expected to be largely in keeping with the expansion of mobile beyond devices such as phones and tablets into new territory. Beyond the “iWatch,” Apple has recently ramped up its streaming video services, and is even rumored to be pushing into automobiles.

But McCourt’s upgrade from “outperform” to “strong buy” also rests on the company’s valuation. Currently, Apple’s price to earnings multiple of 9.5 is low relative to the industry average as well as the S&P 500 average, while it carries an attractive dividend yield of 3 percent, making for a safer bet for investors even in the event that new products are not forthcoming, or not as “game-changing” as is still expected from the formerly dominant tech giant.

The upgrade from Raymond James also gave Apple a $600 price-target.

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