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Gene Munster: Apple Tends To Outperform By 12% Going Into iPhone Launch

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Gene Munster: Apple Tends To Outperform By 12% Going Into iPhone Launch
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While the secondary iPhone market seems to be stable, expectations for iPhone 7 are very low, and may rise modestly ahead of the September launch, Piper Jaffray’s Gene Munster said in a report. He has an Overweight rating on Apple Inc. (NASDAQ: AAPL) with a price target of $153.

The U.S. pricing trends of used iPhones reflect that the resale value of the iPhone SE, 6S/6S Plus is broadly in-line with the resale value of the iPhones 6/6 Plus during the same post-launch period last year, which suggested stability in aftermarket iPhone supply and demand, Munster mentioned.

Related Link: Citi Cuts Apple's Second-Half Estimates, Sees Stock Range-Bound

iPhone 7 Launch

Munster expects Apple to be able to generate double-digit year-over-year unit growth in the March and June quarters of 2017 if the performance of the iPhone 7 is flat compared to the iPhone 6, “which we view as reasonable given a large 2-year upgrade base from that cycle.”

What History Tells Us

A look at the past three major iPhone launches, namely that of iPhone 4, 5 and 6/6 Plus, reveal that Apple’s shares outperform the S&P 500 by 14 percent on average 12 weeks ahead of the launch.

“We believe we are 12 weeks away from the iPhone 7 being available for sale. Although this is a limited sample (and a repeat of share performance is not guaranteed), we believe it provides some insight into how investor expectations impact shares ahead of the event,” the analyst wrote.

Latest Ratings for AAPL

DateFirmActionFromTo
Jan 2017BarclaysDowngradesOverweightEqual-Weight
Jan 2017OTR GlobalDowngradesNegative
Jan 2017GuggenheimInitiates Coverage OnBuy

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