Drexel Hamilton's 'Apple Monitor' Shows Strong Performance In March

Brian White of Drexel Hamilton still believes there is much to look forward to from Apple Inc. AAPL in 2016 and the brokerage's Apple Monitor (i.e., basket of Apple suppliers in Taiwan) March sales performance was stronger than the eleven-year average. "We continue to believe there is much to look forward to from Apple in 2016, including a new iPhone cycle with the iPhone 7, the ramp of Apple Watch, the potential for an enhanced capital return program for shareholders and new geographic opportunities (e.g., India, Tier 3-5 cities in China)," White wrote in a note to clients. According to White, March sales for Apple Monitor increased 42 percent month-over-month (MoM) and better than the average increase of 30 percent over the past eleven years. The analyst noted that the "first quarter sales for the Apple Monitor fell by 35 percent quarter-over-quarter (QoQ) and weaker than the average decline of 17 percent over the past eleven years. However, over the past three years, sales for the Apple Monitor have dropped 27 percent QoQ in the March quarter." White added that "Apple's second quarter fiscal 2016 outlook calls for sales to fall by 30-34 percent QoQ and much weaker than the average decline of 17 percent QoQ for the past five years. In the second quarter of fiscal 2015, Apple's sales fell by 22 percent QOQ." "We are comfortable with the performance of our Apple Monitor in 1Q:16 as it relates to our estimates and Apple's 2Q:FY16 outlook," White said. Shares of Apple rose 1.15 percent to $109.91. White has a Buy rating and $200 price target on the stock.