RBC Raises Price Target on Apple Shortly After Dreaming About Benefits of a Merger With Disney

Discussion in 'Politics, Religion, Social Issues' started by MacRumors, Apr 17, 2017.

  1. MacRumors macrumors bot

    MacRumors

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    RBC Capital Markets raised its AAPL price target to $157 today, up from $155, as it believes iPhone sales were stable to modestly better than expected in Apple's second quarter, which ended on March 31.

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    The investment bank's lead Apple analyst Amit Daryanani said the company's iPhone mix continues to remain positive, with "more" Plus-sized models sold in the quarter than it previously forecasted. iPhone 7 Plus models carry a $120 premium over iPhone 7 models, contributing to a higher average selling price.

    RBC now estimates Apple will report quarterly revenue of $53.5 billion, matching the high end of the company's guidance. Apple is scheduled to report its second quarter earnings results on May 2 at 1:30 p.m. Pacific Time. MacRumors.com will provide live coverage of Apple's conference call at 2:00 p.m. Pacific Time.

    The bank said it remains positive about AAPL based on so-called "iPhone 8" refresh cycle tailwinds, benefits from a possible capital allocation increase, the acceleration of its growing Services category, and potential upside from U.S. Donald Trump's political agenda in relation to taxes and cash repatriation.

    Apple's stock price has been rising steadily since November, as rumors suggest the company will launch its first iPhone with an OLED display and slim bezels, potentially mirroring the design of Samsung's new Galaxy S8. Many analysts have maintained a "buy" or equivalent rating on AAPL since March or earlier.

    Last week, RBC Capital Markets generated headlines when it outlined the potential benefits of a completely speculative Disney acquisition.

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    In a lengthy research note, the bank said such a deal would create a "tech and media juggernaut like no other" and instantly expand Apple's services, content, and media portfolio. Assets such as ABC and ESPN, for example, could lay the foundation for Apple's long rumored but elusive streaming TV service.

    An excerpt from Daryanani's research note obtained by MacRumors:
    Daryanani said the so-called "mega deal" would diversify Apple away from hardware and help the iPhone maker fulfill its goal of doubling its Services category by 2020. He also thinks it would be an appropriate use of Apple's massive cash hoard, should the U.S. ever offer a cash repatriation holiday.
    Daryanani said there is a "greater than 0%" chance that Apple acquires Disney, but he admitted that the odds are low at this point.

    Jim Cramer, host of CNBC's "Mad Money" show, believes the Apple-Disney speculation was more about influencing the stock market than anything else.
    AAPL closed at $141.83 on Monday. The Walt Disney Company closed at $113.78.

    Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

    Article Link: RBC Raises Price Target on Apple Shortly After Dreaming About Benefits of a Merger With Disney
     
  2. currocj macrumors regular

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    PRSI forum? How does this meet that requirement? Does the name Trump auto-trigger said restriction?

    Sounds like simple business speculation to me
     
  3. tennisproha, Apr 17, 2017
    Last edited by a moderator: Apr 19, 2017

    tennisproha macrumors 6502a

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    Likely because it's about speculation and they don't want people to go ******* crazy over it.
     
  4. tentales macrumors 6502a

    tentales

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    When you "can't innovate anymore, my ass", you merge to keep the shareholders happy.
     
  5. Hieveryone macrumors 68020

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  6. alex00100 macrumors regular

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  7. Naraxus macrumors 6502

    Naraxus

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    Oh god no. I don't want Apple anywhere NEAR Disney
     
  8. groove-agent macrumors 6502a

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    Could you imagine how derailed Apple would become if they merged with Disney?
     
  9. stiligFox macrumors 65816

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    That would be disastrous for both companies...
     
  10. NickD73 macrumors regular

    NickD73

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    Apple is too rich for its own good. The executives are too busy partying and hooking up with girls/guys to innovate.
     
  11. timborama macrumors regular

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    Could you imagine how much more derailed Apple would become if they merged with Disney?
     
  12. infinitejest, Apr 17, 2017
    Last edited: Apr 18, 2017

    infinitejest macrumors 6502

    infinitejest

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    #12
    I think quite the opposite.
    Content is one thing Apple still lacks. The more I think about the acquisition, the more it makes sense to me.
    Not sure, if it's ever gonna happen, but I hope so. An acquition would have enormous potential for both sides.
     
  13. pacalis, Apr 17, 2017
    Last edited: Apr 17, 2017

    pacalis macrumors 6502a

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    This is a monumentally stupid idea.

    RBC should send their MBAs back to retake their M&A and strategy classes.
     
  14. IJ Reilly macrumors P6

    IJ Reilly

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    The current market cap of DIS is $180B and companies are rarely acquired without a significant premium paid over current market value, so what is being talked about here would soak up virtually every dollar Apple has salted away both in the U.S. and abroad. For some reason this wasn't seen to be important enough to mention, but it is the single most important consideration. Even if some theory can be spun to support the idea that Apple would get something out of a merger, the second important question is why Disney would be interested in one.
     
  15. alexgowers macrumors 65816

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    I don't understand the benefits of a merger. Would it not be better to develop content slowly from the ground up? Shortcuts rarely work out in life and this seems like a big one. Surely a Disney merger would prevent access to content from rivals as Apple would no longer be able to stay neutral. It would probably make the iTunes Store implode.
     
  16. Ice-Cube macrumors 6502a

    Ice-Cube

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  17. Abazigal macrumors 604

    Abazigal

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    I guess it's all a matter of perspective.
     
  18. thekev macrumors 604

    thekev

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    I can't think of a single case where consolidation of already gigantic companies was an improvement.
     
  19. infinitejest macrumors 6502

    infinitejest

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    #19
    Do some research then.
     
  20. pacalis macrumors 6502a

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    Acquisition of gigantic companies works if the companies are in the same business lines with similar cultures and strategies. If they are different business lines, it is a disaster.

    Imagine, Jony Ive redesigns all of Disney's theme parks.

    This idea is soooooo stupid.
     
  21. Wiesenlooser macrumors 6502a

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    It makes sense. The devices they sell more and more rely on media / content. The Apple TV struggles because of content deals missing.

    And Disney really is the Apple of Media.
     
  22. thekev macrumors 604

    thekev

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    #22
    Hmm..you were the one that suggested this nonsense. Generally the shareholders don't do well in large acquisitions. I'll give you a classic example.

    http://www.economist.com/node/1035824

    These things are typically a disaster, even if the merger itself is actually approved. That one was particularly bad, but Apple has done far better by picking up small companies that can be integrated without an excessive quantity of layoffs and undervalued IP.
     
  23. ApfelKuchen macrumors 68020

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    #23
    Disney fans still ask, "What would Walt do?" Apple fans ask, "What would Steve do?" I don't want to think what would happen if you put them all together on the same forum!

    Meanwhile...
    Steve is ousted from Apple
    Steve founds NeXT and buys Pixar
    Apple buys NeXT and brings Steve back into the fold
    Disney buys Pixar and puts Steve on its board of directors
    Apple buys Disney? Didn't Guy Kawasaki predict that in 1994?

    And what about Laurene Powell Jobs (controls about 7.5% of Disney and 0.7% of Apple)?
     
  24. mrcobra92 macrumors 6502

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    #24
    Hmmmm, not sure how I feel about this idea. I'm a HUGE Disney parks fan (I frequent many Disneyland forums much like Macrumors but for Disney parks news/rumors) and could see some benifit from some more cash flow to the parks division. DL desperately needs a 3rd gate and WDW needs a complete overhaul of Epcot which could be cool with Jony Ives visions. Still don't know what to think overall though.

    This is what the Disney parks fans think of the idea.

    https://discuss.micechat.com/forum/...ussion/disneyland-resort/8504206-apple-disney
     
  25. infinitejest macrumors 6502

    infinitejest

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    #25
    Before you call it nonsense, you should actually start giving specific reasons why it wouldn't be an opportunity for Apple and Disney, instead of using examples from the past.
    Also, your example shows a technology company acquiring a technology company - whole different scenario.
    Apple could benefit from Disney's content and Disney could benefit from Apple's distribution (and devices).

    So far, your only point why it wouldn't work is that it hasn't worked for some other companies before. That's what I call nonsense.
     

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