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

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.