On Tuesday, CFRA maintained its Buy rating and $210.00 price target on Apple Inc. (NASDAQ:AAPL), in light of the company's announcement to overhaul its iPad lineup. The new offerings include a larger 13-inch iPad Air, and updates to the iPad Pros, which will now feature M4 chips, an upgrade from the M2 chips previously used. The iPad Pros are also set to boast improved Tandem OLED display panels and enhanced camera capabilities, with the 11-inch model priced at $999, up from $799, and the 13-inch model at $1,299, up from $1,099.
The iPad Air will now be equipped with the M2 chip, with the 11-inch model priced at $599 and the 13-inch at $799. Apple also introduced a new Apple Pencil Pro, priced at $129, which includes haptic feedback and an improved Magic Keyboard. These devices are available for order as of today and will be available on May 15, with the iPad Pros starting at 256GB of storage and the iPad Air at 128GB.
CFRA's analysis points to Apple's quick succession from the M3 to the M4 chips, which were introduced less than seven months apart and are also found in Mac computers. This rapid advancement in hardware capabilities is believed to be in anticipation of new AI applications and software capabilities, with an eye on the upcoming Worldwide Developers Conference (WWDC).
The analyst from CFRA believes that after a significant period without iPad updates—the last refresh occurred in 2022—the latest improvements and more attractive price points for the Pro models will contribute to a resurgence in growth for this product category. This is a notable shift, as the iPad has experienced five consecutive quarters of decline and year-over-year drops in nine of the last ten quarters.
InvestingPro Insights
As Apple Inc. (NASDAQ:AAPL) continues to innovate with its latest iPad lineup, investors and analysts are closely monitoring the company's financial health and market performance. With a substantial market capitalization of $2.79 trillion and a P/E ratio of 28.2, Apple stands as a titan in the technology sector. The company has demonstrated a slight decline in revenue growth over the last twelve months as of Q2 2024, with a -0.9% change, indicating a fiercely competitive market landscape.
InvestingPro Tips suggest that Apple's management has been strategically repurchasing shares, reflecting confidence in the company's future. Additionally, Apple has shown commitment to its shareholders by raising its dividend for 12 consecutive years, a sign of financial stability and a reward for investor loyalty. Despite the challenges faced by the iPad segment, Apple's overall financial strength and strategic decisions could help catalyze a turnaround for the product line.
For those considering an investment in Apple, or current shareholders looking to deepen their understanding, InvestingPro offers 15 additional tips on the company's financials and market performance. To explore these insights and make informed decisions, visit https://www.investing.com/pro/AAPL and take advantage of the exclusive offer using coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.