Apple: shares up as Wedbush raises target

(CercleFinance.com) - Apple shares are up 3.
1% at 194.2 dollars in early trading today, outperforming a 0.3% rise in the Dow Jones index, as Wedbush raises its target price for the US tech giant from 200 dollars to 215 dollars and repeats its "buy" rating on the stock ahead of the launch of its streaming video service.

On Monday 25 March, Apple is expected to launch its long-awaited video streaming service that will compete with the likes of Netflix, Disney, and Hulu, the broker writes in a note.

Wedbush says it views the launch as a "pivotal step" for the Cupertino-based company in further driving its services business and entering the "streaming content arms race" which is currently taking shape.

According to the broker, the services business remains the wild card in driving Apple's valuation.

Wedbush estimates the valuation of the company's services franchise to be worth roughly 400 billion dollars on a standalone basis. The new streaming video content service, which is set to be officially launched this autumn, will include partners content, as well as original content from Apple, it says that Apple is currently in production deals with Oprah, Reese Witherspoon/Jennifer Aniston, Steven Spielberg, and plans to spend roughly 1 billion dollars on original content this year.

Wedbush believes reaching 100 million subs in the medium term (3 to 5 years) is a "realistic goal" that could translate into a 7 billion dollars to 10 billion dollars annual revenue stream over time.

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