Credit Suisse Sees Apple At $145: Predicts iPhone Growth Hit 60% Last Quarter

In a report published Wednesday, Credit Suisse analyst Kulbinder Garcha reiterated an Outperform rating and price target of $145 on Apple, Inc. AAPL. Datapoints suggest continuing strength in iPhone volume and mix in the near term. "We continue to believe that the market underestimates the length of the current product cycle… Given high retention rates, a superior ecosystem, and multi-product compute advantage, we believe FCF of $65-70bn should be sustainable in the long term," Garcha said. The analyst raised his iPhone volume estimate for CY15 to more than 250 million units, while expecting 56 million units for June 2015. The analyst believes that iPhone 6 Plus would comprise 27 percent of the volumes for the year and be 28 percent accretive to the iPhone average, leading to improved gross margins. However, the analyst expects the iPad business to see additional pressure. To add to this, the company has delayed the launch of iPad Pro, as well as the 9.7 inch iPad. Therefore, the CY15 and CY16 unit estimates have been lowered. "While investors will continue to focus on the product/services driven growth, we believe a major EM market opportunity remains for the company," Garcha added. The analyst believes that EM would contribute incremental $97 billion to Apple's sales and $3.15 to the EPS over time, "as the company expands its retail, brand and online presence."