Read Why Michael Farr Sees Apple, Disney, Visa As Top Picks For 2022
Michael K. Farr, President and CEO of Farr, Miller & Washington, named his top ten picks for 2022, CNBC reports.
"These are companies that I find especially attractive in light of their valuations or their potential to benefit from economic developments."
Farr's top picks include Apple Inc (NASDAQ: AAPL), The Walt Disney Co (NYSE: DIS), and Visa Inc (NYSE: V).
Apple is the world's most valuable company by market capitalization.
The iPhone segment is still the most significant contributor to revenue and earnings, but Services is the fastest-growing and highest-margin business.
He sees Apple gaining mass attraction in 2022 on releasing its first AR/VR device.
Looking further, he sees double-digit EPS growth through mid-to-high-single-digit revenue growth combined with a steady to increasing margin and share repurchases as the company moves toward a cash neutral balance sheet position.
He sees growth in the installed base continuing with increased penetration of "halo" products and services like the Watch, AirPods, music, TV+, Arcade, Fitness+, News+, and iCloud.
Farr sees Disney subscriber growth improve over the next few quarters as it launches service into new markets and adds original content to the service.
As for the legacy businesses, the theme parks have seen an uptick in recent months, and that should continue given the pent-up demand for travel and experiences.
He expects demand to be the strongest for tentpole films, as seen by the release of "Spider-Man: No Way Home."
Farr still sees a long runway for Visa's growth in electronic payments with business-to-business payments as an opportunity to expand its addressable market significantly.
Farr considers the threat from "buy now, pay later" is overblown, as up to 80% of those using such services pay off their balance using a debit or credit card, resulting in Visa revenue being as much as or more significant than if the network had been used on the initial purchase.
The balance sheet is solid, and Farr sees a recovery in personal travel over several years, and secular tailwinds from cash-to-card (and digital) should continue.
Price Action: DIS shares traded higher by 1.63% at $155.30 on the last check Tuesday.
Latest Ratings for AAPL
Dec 2021 | Citigroup | Maintains | Buy | |
Dec 2021 | Evercore ISI Group | Maintains | Outperform | |
Dec 2021 | B of A Securities | Upgrades | Neutral | Buy |
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