GoPro (NASDAQ:GPRO) jumped in Monday’s trading after an analyst at Northland Capital said the wearable camera maker would make a "compelling acquisition target" for Apple (NASDAQ:AAPL).
Shares were up 4.2% at $33.76 at 12:41 p.m. in New York, paring this year’s slump to 46%.
Analyst Gus Richard said the stock's recent selloff has presented "a compelling entry point" for investors and companies, like Apple seeking original content.
"While how GoPro monetizes content is up in the air, it is adding unrecognized value to the franchise," Richard wrote in a note to clients. "Moreover, we think GoPro would be an interesting acquisition for Apple from both a hardware, software and content prospective."
Northland Capital has reiterated its “outperform” rating on GoPro stock, with a 12-month target price of $80.
The firm maintained its bullish stance on the stock, as it believes that the recent stock price slump offers lucrative entry point for investors.
Richard said 2016 estimates for GoPro could be raised, because they don't currently include the benefits from sales of cameras used for drones.
He expects up to 1mln drones will be bought as Christmas gifts this year, with about 80% likely to have a camera attached.