JP Morgan’s Top Telecom & Networking Equipment Stock Picks For 2015

/ January 19, 2015

In a recent report, JP Morgan analysts gave their take on the 2015 outlook for telecom and networking equipment/IT hardware. Analysts made predictions on a wide range of topics from the smartphone deceleration to the impact of the Apple Watch.

PC/Tablet Forecast

Analysts expect a strong start to 2015 when it comes to PC shipments. However, they expect tablet growth to begin to flatten this year. The report notes that this forecast would be significantly impacted if Apple Inc. AAPL 0.78% were to launch its iAnywhere platform this year.

Apple Watch

The report predicts a launch of the Apple Watch to come in 1Q15. Analysts are predicting 25.6 million shipments for the year with a 30 percent EBIT margin. If these numbers are accurate, the Apple Watch could provide a 4.3 percent boost to Apple’s 2015 earnings.

100G Optical

Analysts are predicting Verizon Communications Inc. VZ 1.89% will announce a rollout of metro 100G service in 1Q15. Analysts estimate that total WDM revenues grew by 5 percent in 2014. That overall growth number is based on a breakdown that includes a 68 percent increase in 100G revenues, a 38 percent decline in 40G revenues and a 12.3 percent decline in revenue for 10G and lower.

Telecom Capex Tightening

Analysts expect the lowest capex for the telecom industry since 2009. Not surprisingly, they also predict the lowest revenues for the industry since 2009.

Smartphone Saturation Continues

Analysts see growth in smartphone shipments continuing to slow over the next two years. “We are currently forecasting Smartphone shipments to grow 12.3 percent Y/Y in 2015 and 9.6 percent Y/Y in 2016.”

Stock Picks

The report included the following top stock picks in the sector:

Read this article and all my other articles for free on Benzinga by clicking here

Want to learn more about the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!

Related posts