iPhone 7 Plus Plus: BTIG Raises Apple's Price Target From $124 To $133

Following the launch of the iPhone 7, various mobile phone operators are offering incentives for the migration to the new device from Apple Inc. AAPL, BTIG’s Walter Piecyk mentioned. He raised the price target for the company from $124 to $133.

Positive Channel Checks

Wireless operators are the primary distribution channel for Apple and provide insight into upgrade rate trends and smartphone sales through the quarter. Commentary from the wireless operators over the last couple of days indicates meaningful iPhone preorder activity, and reduces the risk of Apple missing expectations, analyst Piecyk said.

The estimates reflect Apple’s return on revenue and EPS growth in the December quarter, Piecyk added. He expects iPhone sales to be down 6.3 percent y/y in the September quarter, but up 11.4 percent sequentially.

New Subsidies

Although the wireless industry is at peak margins and record low churn, AT&T Inc. T and Verizon Communications Inc. VZ are also offering free iPhone promotions that “effectively include a phone subsidy,” the analyst mentioned.

“To be fair, the appeal of these “Free iPhone” promotions may be limited, given the requirement to pay off any balances still owed on existing phone payment plans,” Piecyk noted, while adding that the promotion appears more attractive to subscribers with older models of the iPhone.

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