Market Overview

Super 8: Apple's Next iPhone Cycle Something To Look Forward To

Share:
Super 8: Apple's Next iPhone Cycle Something To Look Forward To

Kulbinder Garcha of Credit Suisse maintained an Outperform rating and $150 price target on Apple Inc. (NASDAQ: AAPL) ahead of its fiscal first quarter results, scheduled to be released on January 31.

Garcha is estimating Apple will earn $3.11 per share in the quarter on revenue of $75.6 billion. The analyst added that multiple data points suggest iPhone shipments will read in-line to ahead of expectations with the potential for a strong mix.

Specifically, Garcha is estimating Apple shipped 77 million iPhone units in the quarter.

iPhone 8 Super Cycle

Looking past next week's earnings print, Garcha believes that over the course of the next year, an iPhone 8 "Super Cycle" will play out. The analyst believes three new models will be introduced, one of which will be OLED and the new iPhone line will help drive up replacement rates and attract new customers.

In fact, Garcha now believes Apple's iPhone volume will grow to around 250 million units by 2019 from around 215 million units in 2016. Given the high attachment rate associated with Apple's client base, the analyst also believes a free cash flow of around $67 billion should be sustainable long term.

However, recent fluctuations in the foreign exchange market represent a top line and gross margin headwind for Apple in the upcoming earnings report. These same foreign exchange moves could prompt a high selling price for the next generation of iPhones in foreign markets.

Other Estimates

Here are some more estimates Garcha presented in his research report.

  • Calendar year 2017 earnings per share of $9.57.
  • Calendar year 2018 earnings per share of $11.50.
  • Calendar year 2017 iPhone average selling price of $641.
  • Calendar year 2018 iPhone average selling price of $659.
  • Calendar year 2017 iPhone gross margin of 38.5 percent.
  • Calendar year 2018 iPhone gross margin of 39.3 percent.

Latest Ratings for AAPL

DateFirmActionFromTo
Oct 2019MaintainsOutperform
Oct 2019MaintainsEqual-Weight
Oct 2019MaintainsOutperform

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Apple Earnings iPhone iPhone 8 Kulbinder GarchaAnalyst Color Analyst Ratings Tech Best of Benzinga

 

Related Articles (AAPL)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
PTONBank of AmericaInitiates Coverage On29.0
ITRICanaccord GenuityMaintains87.0
GWPHNeedhamInitiates Coverage On200.0
BABairdDowngrades
LUVStifelDowngrades60.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
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.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
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

Seagate Earnings Move May Be Compounded By Short Squeeze

18 Biggest Mid-Day Gainers For Wednesday