RBC Raises Price Target on Apple Shortly After Outlining Potential Benefits of a Merger With Disney

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.


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.


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:
Together, Apple and Disney would instantly have access to global distribution via Apple's installed base and the global iTunes store, and a massive library of content and studio capacity via Disney to make future movies and shows. A digital content service could be put together in relatively short order. Apple has the advantage of integrating its price to consumers with its hardware. For example, buy a new iPhone and receive a 12-month subscription to the streaming service for free.
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.
A prerequisite to Apple-Disney is a regulatory environment that would allow Apple to use its huge amount of cash assets for a domestic acquisition. If a cash repatriation tax holiday results in a 9% tax on offshore cash brought to the United States, we estimate that Apple would effectively have access to cash of $223 billion. After adjusting for operational requirements, Apple should have $200 billion cash available for discretionary uses.
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.
"The only thing that's really accomplished by this kind of speculation? The short-sellers will be afraid to bet against Disney's stock because of newfound fears of a takeover lurking. It really does put a bid underneath, simply because it was just too juicy to ignore," Cramer concluded.
AAPL closed at $141.83 on Monday. The Walt Disney Company closed at $113.78.

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‘Finding Dory’ recut as a thriller is the new ‘Nightmare Before Christmas’

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Disney-Pixar maintains its box office streak with Moana but what if they turned one of their classics into a more darker, twisted story plot? Would they still swim up the box office ranks? We thought we’d give it a try.

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Globe’s ‘Rogue One’ ad is a heck of a tearjerker aimed at inspiring courage

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A partnership between Filipino telecom Globe and Disney Southeast Asia has produced one of the greatest tear-jerking-warm-your-heart ads that’ll strike your feed today.

The ad features a shy girl who wears a Stormtrooper helmet to school, as a shield for a disability.

We won’t spoil it for you, but suffice it to say, the rousing reveal is worth it.

The ad is part of Globe’s #Create campaign promote and protect the rights of Filipino girls and young women — and this time using the magic of a galaxy far, far away.

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‘Fantastic Beasts’ shows signs of life at the box office

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Disney’s Moana is number one at the box office this weekend, with an impressive $55.5 million estimated as its domestic start.

That might seem like a low number next to the $74.4 million opening for Fantastic Beasts and Where To Find Them last week, but context is importantMoana is the tenth Walt Disney Animation Studios release since its mid-aughts reformation, and it’s the third-highest opening to date, after Zootopia and Big Hero 6.

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Wintery setting of ‘Frozen’ gets a new look in this animated short

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You know the movie. You know the soundtrack. But do you know how Anna, Elsa, Kristoff, and the wintery setting of Frozen might look if the hit movie were remade as an 8-bit, classic arcade quest game? Now you do. 

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History Between Steve Jobs and Pixar Highlighted in New Book ‘To Pixar and Beyond’

Steve Jobs' history with the now-acclaimed animation studio Pixar began in 1986 when the former Apple CEO purchased The Graphics Group, which was one third of the Computer Division of Lucasfilm, renamed it Pixar Animation Studios, and began guiding it into a burgeoning feature film production company. In a new book called To Pixar and Beyond, written by former Pixar chief financial officer Lawrence Levy, the history between Jobs and Pixar is highlighted and deepened by looking at the struggling early years of the studio (via Bloomberg).

With the subtitle "My Unlikely Journey With Steve Jobs to Make Entertainment History," Levy's financial knowledge of Pixar's early days helps to put the struggles that Jobs had in the mid-nineties with the company into context. By 1994, Jobs was said to have spent $50 million investing in Pixar, and his workings with some of the company's employees was reported as being "frayed."

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Pixar executives circa 1995: Lawrence Levy, CFO; Ed Catmull, CTO; Steve Jobs, CEO; John Lasseter, VP of Creative; Sarah McArthur, VP of Production

Working in 1994 as a technology executive within Silicon Valley, Levy said he received a call from Jobs that November and soon after became Pixar's CFO due to viewing rough footage of what would eventually become Toy Story, which was one year from debuting in theaters. Following the success of that movie, Levy remembered looking into the original deal Jobs made with Disney, and much of his new book describes the lengths the two went through to validate Pixar's worth within the larger context of Disney, eventually leading to the 2006 purchase of Pixar by Disney.

The book isn't all business, however, with a few sections apparently offering "more insight" into the world of Steve Jobs when he wasn't working at Apple.
For those who can’t get enough of Jobs, Levy offers more insight into his world. A neighbor of Jobs in Palo Alto, California, back in the day, Levy describes a surprisingly laid-back scene where he could simply stroll through the entrepreneur's back door and go on long weekend walks with him, chatting about the business. The more controlling side of the future billionaire also comes across, as Levy describes a carefully choreographed Fortune profile in 1995 that rankled Pixar staffers because it focused mostly on Jobs.
Levy's book ends at the sale in 2006, with Bloomberg noting that "readers looking for more of Pixar's recent history won’t find it here." The history of the studio within the book accounts for movies ranging from Toy Story to The Incredibles, but doesn't include any behind-the-scenes knowledge of more recent releases, like last year's Inside Out and The Good Dinosaur.

To Pixar and Beyond can be purchased on the iBooks Store for $14.99. [Direct Link]

(Image via This Day in Pixar)


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