FBR: Apple Growth Fears 'Overblown'

• Apple Inc. AAPL shares have lost 19 percent in the last six months.
• FBR & Co’s Daniel H. Ives maintained an Outperform rating for the company.
• Concerns over China’s growth and softer-than-expected demand for the iPhone 6s appear overblown, Ives stated.

Apple’s investors have witnessed a “miserable, dark period” over the last few months, and there are no signs of this abating, analyst Daniel Ives said.

There are concerns around the growth of iPhone 6s, with less-than-stellar demand. Ives added, however, that this is a near-term product transition period that would ultimately result in brighter days ahead “on the shoulders of the flagship iPhone 7 release as Apple is poised to benefit from pent-up consumer demand/mega product cycle heading into September 2016, in our opinion.”

The analyst expects this interim product cycle to help Apple achieve about 220 million iPhone unit sales in 2016, and a robust 250–255 iPhone unit sales number in 2017 “on the heels of a much anticipated iPhone 7 cycle.”

China continues to be “the main fuel in the tank” for Apple going, despite lingering growth fears. While this is definitely a “turbulent” period for Apple and its investors, Ives believes that the bearish sentiment “has swung too far now”

Initial checks for the December quarter and Holiday season have come in “relatively strong.” Ives added that Apple should be able to meet the Street’s iPhone forecasts for F1Q. “We believe Apple represents a compelling risk/reward and would be buyers.”