Pacific Crest Securities issued a company report on Apple Inc. AAPL after reports of high iPhone demand. Pacific Crest rates Apple as Sector Weight, while a price target is unavailable.
Apple is expected to report earnings on Monday, April 27.
Analysts Andy Hargreaves and Evan Wingren wrote, "Solid demand and the likelihood for building inventory prompt an increase to our FQ2 (March) iPhone unit estimate to 58.1 million from 56.8 million. Although we are also lowering our iPad unit estimates, the increase to iPhone estimates drives our FQ2 EPS estimate to $2.17 from $2.15, which is slightly above the consensus estimate of $2.14...We are raising our expectation for sustained share gains for Apple vs. Android, which prompts an increase to our F2015 and F2016 iPhone unit estimates.
"We are also slightly increasing our F2015 Apple Watch unit estimates based on supply checks and the strong initial response."
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Pacific Crest notes that Apple has seen an increase in market share gain for the iPhone vs. Android. However, the analysts believe that the high-end smartphone market is saturated, thus the volume of iPhones sold will decline. Pacific Crest estimates that 13 percent of Apple's iPhone user base upgraded to the iPhone 6 family of products due to excitement over the phone's larger size and aggressive carrier promotions. However, if the next product cycle doesn't produce a similar upgrade percentage, Apple will face major growth challenges.
Shares of Apple traded recently at $127.01, up 1.8 percent.
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