The Street Already Preparing Estimates For Apple's 2018 Smartphone Cycle

2017 is still a handful of weeks away, but the Street is already coming out with 2018 estimates for Apple Inc. AAPL.

Michael Walkley of Canaccord Genuity expects 2018 EPS of $10.08 on revenue of $246.18 billion and sees about 200 million to 250 million iPhone unit sales annually through C2018.

2017 In Focus

“We anticipate iPhone units should return to year-over-year growth in Q1/F2017 and anticipate a stronger upgrade cycle in F2018 with the 10-year anniversary iPhone products,” Walkley wrote in a note.

The analyst also expects 2017 iPhone sales to return to 2015 levels around 230 million units, resulting in strong earnings and cash flow levels to support ongoing capital returns to shareholders.

Walkley, who maintains his Buy rating and $140 target on Apple shares, believes Apple should monetize the iPhone installed base through additional products and services.

The analyst said the potential move would help Apple generate additional sales through hardware and services such as Apple Watch and Apple Pay.

Other Expectations

Further, the analyst expects Apple could leverage its installed base to boost sales of its higher margin services business through additional iTunes, apps and software sales, Apple Pay and Apple streaming music service.

“Therefore, despite our stable iPhone sales expectations in the 200 million to 250 million range annually, we believe the growing, loyal, and sticky iPhone installed base provides Apple with long-term opportunities to drive further topline growth through additional products, services, and software sales,” Walkley added.

At last check, shares of Apple were up 1.65 percent at $111.88.

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Posted In: Analyst ColorLong IdeasNewsPrice TargetPreviewsReiterationAnalyst RatingsMoversTechTrading IdeasCanaccord GenuityMichael Walkley
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