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UPDATE: Mizuho Raises PT on Apple as Greater iPhone Availability Leads Quarter Earnings


In a report published Sunday, Mizuho Securities analyst Abhey Lamba reiterated a Buy rating and raised the PT on Apple (NASDAQ: AAPL) from $520 to $550 based on higher F4Q13 revenue and potential EPS results due to strong iPhone shipments.

Mizuho noted that iPhone shipments for the quarter should beat expectations from broader distribution. Lamba reported that unit shipments are expected to end up around 32mm, crushing iPad distribution of expected 12mm. The analyst commented that this positive outlook is likely due to greater iPhone availability and refresh of iPads. Lamba wrote, “We expect the company's outlook to indicate significant acceleration in iPhones, which would imply sequential improvement in margins.”

Lamba estimated F4Q13 revenues to be in the $37-38B and EPS likely to stand within the $8.05-8.25, higher than the consensus of $36.8B and $7.89, respectively. Further, Mizuho estimated F1Q14 revenues to range from $55-57B and EPS of $14-14.35. The analyst commented, “Given management's recent commentary and our expectations that revenue outperformance will be led by iPhones, we expect gross margin to end up slightly above the high end of management's outlook of 36-37%.” Mizuho noted that 2014 should be a strong product year for Apple with the next iPhone launch including a larger screen and a new product category.

Apple will report F4Q13 results on October 28. Apple closed at $489.64 on Friday.

Posted-In: Abhey Lamba Mizuho SecuritiesAnalyst Color Price Target Analyst Ratings


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