Apple Downside Limited Despite Coming iPhone Sales Decline, PacCrest Explains

In a report published Wednesday, Pacific Crest Securities analyst Andy Hargreaves maintained a Sector Weight rating on

, despite expectations of a decline in iPhone sales in the upcoming refresh cycle. Analyst Andy Hargreaves commented, "Although we continue to expect iPhone sales to decline in the coming refresh cycle, ongoing share gains should prevent the decline from being as severe as we previously expected." The iPhone unit estimates for F2015 and F2016 have been raised from 229 million to 236 million and from 208 million to 218 million, respectively. To reflect this upward revision, the EPS estimates for F2015 and F2016 have been raised from $9.13 to $9.41 and from $8.95 to $9.29, respectively. In the report Pacific Crest Securities noted, "We believe the majority of people earning $15,000 a year or more in the world will own an iPhone exiting F2015. Our and Street estimates anticipate further growth in the iPhone user base going forward, which creates risk if we reach the point of complete saturation or if a competitor slows Apple's share gains." Despite expectations for an EPS decline in F2016, the "extraordinary stickiness of Apple's iOS platform" and the company's ongoing cash-return program are likely to "limit multiple contraction from current levels, which should limit downside," Hargreaves added.