Market Overview

Raymond James On Neutral Apple Stance: iPhone 5SE Cannibalization, iPhone 7 Optimism In Focus

Share:

Raymond James’ Tavis C. McCourt believes although the worst year-on-year declines appear to be behind Apple Inc. (NASDAQ: AAPL), year-on-year growth is still likely to be a few quarters away.

McCourt maintains a Market Perform rating on the company.

Consensus Vs. Estimates

The analyst mentioned the consensus expectations for the iPhone 6S cycle had been “far too optimistic,” although the gap between the estimates and the consensus EPS expectations for FY16 have narrowed with the setting in of the realization of the 6S cycle.

The March and June quarter EPS estimates are fairly close to the consensus forecasts, and McCourt believes that only few surprises are likely related to the guidance and results.

Related Link: KGI's Kuo: Apple iPhone SE Sales Worse Than Expected On Opening Weekend

However, the consensus iPhone unit expectations could prove too conservative.

iPhone 5SE

McCourt also expects the iPhone 5SE to be “reasonably successful,” although ASPs are likely to be lower due to promotions and mix.

“Probably the single biggest risk to June results is whether 5SE demand is incremental or simply cannibalizes more margin-rich iPhones,” the analyst said.

iPhone 7

Although there appears to be some uncertainty regarding the iPhone 7 cycle, McCourt expects the 7S to be a more meaningful upgrade than the 7, since the latter “is unlikely to have any meaningful hardware change beyond waterproofing.”

In fact, the analyst believes that the iPhone 7S or 8 would have bigger changes, which in combination with the iPhone 6 hangover having finally run its course, could drive improved trends year-on-year.

McCourt also expects Apple to return to year on year growth in March 2017, which would drive stock valuation as the year progresses.

Latest Ratings for AAPL

DateFirmActionFromTo
Jun 2020WedbushMaintainsOutperform
Jun 2020UBSMaintainsBuy
Jun 2020Deutsche BankMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

 

Related Articles (AAPL)

View Comments and Join the Discussion!

Posted-In: iPhone iPhone 5se iPhone 7Analyst Color Reiteration Analyst Ratings Tech Trading Ideas

Latest Ratings

StockFirmActionPT
SOLOAegis CapitalAssumes4.0
TSLAJP MorganMaintains295.0
CVNAWedbushMaintains125.0
PFSICredit SuisseMaintains46.0
PMTCredit SuisseMaintains22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com