Citi Boosts Q4 iPhone Estimate From 73 Million To 79 Million Units

Citi’s checks suggest that there are early indications of strong iPhone 7 demand across stores in the U.S., Canada, Europe and Asia.

Citi’s Jim Suva maintained a Buy rating on Apple Inc. AAPL, while raising the price target from $120 to $130.

Strong Initial Demand

“Supply remains a gating factor with many stores having received very limited supply of the iPhone 7 Plus and in some cases only to suffice demand from preorders,” the analyst mentioned, however.

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In the United States, Suva believes that increased promotion activity from carriers to drive market share gains, along with the SAMSUNG ELECTRONIC KRW5000 SSNLF Note 7 recalls, could be possible reasons for the increased interest and robust pre-order activity for the iPhone 7.

“Component supply chain order commentary has been positive during the quarter, though some mixed indications of double ordering in China have surfaced recently,” the analyst stated.

Estimates Revised

Suva raised the December quarter estimates, to reflect the positive data points associated with the iPhone 7 launch, as well as the extra week of sales that Apple is expected to see during the quarter.

The analyst now expects 79.4 million iPhone units, from the earlier 73 million units, representing 80 percent quarter on quarter growth.

The revenue estimate has also been raised to $73.3 billion, with gross margins of 38.7 percent and EPS of $3.15.

Full ratings data available on Benzinga Pro.