Market Overview

Analyst: Why The iPhone X Lived Up To Lofty Expectations

Analyst: Why The iPhone X Lived Up To Lofty Expectations
Related AAPL
Tech Sector Earnings: Revenue Growth Widely Expected To Slow, Will Global Uncertainty Weigh?
Market Has A Lot To Digest Amid Brexit News, China Stimulus, Bank Earnings
Universal TV vet joining Apple (Seeking Alpha)

Heading into Apple Inc. (NASDAQ: AAPL)'s product launch event Tuesday, expectations for a high-end iPhone were elevated. The iPhone X, once announced, most certainly lived up to the "lofty expectations," at least according to Piper Jaffray's Michael Olson who maintains an Overweight rating on Apple's stock with an unchanged $190 price target.

Apple's new iPhone X's most notable features include a change to the form factor (edge-to-edge OLED screen) and 3D sensing capabilities with the only setback being the launch date of Nov. 3, Olson commented in a research report. As a whole, the iPhone X captured investor attention and could create a new cycle in which upgrade rates are superior to prior iPhone launches with the exception being the iPhone 6 where unit sales grew 36 percent year over year.

As a whole, the new iPhone cycle could result in a 12-percent growth rate in iPhone unit sales as there are approximately 330 million iPhone users on a device that is at least 2 years old, Olson added. It would be reasonable to assume that a "sizable portion" of these users will be upgrading their phones to the point where approximately 240 million new iPhone units will be sold in the 12 months following the iPhone X launch.


Finally, while Apple will benefit in the immediate term from strong growth, the rate of growth will slow down heading into fiscal 2019 and 2020, the analyst concluded. But even if assuming Apple's operating margins remain flat from fiscal 2018 through fiscal 2020 the company can still grow its earnings per share by 2 percent in fiscal 2019 to $10.90 and 5 percent in the following year to $11.40 per share.

Related Links:

10 Years Later, iPhone X Arrives

Everything You Need To Know About The iPhone 8 and iPhone 8 Plus


Image Credit: Apple

Latest Ratings for AAPL

Jan 2019CitigroupMaintainsBuyBuy
Jan 2019NomuraMaintainsNeutralNeutral
Jan 2019Canaccord GenuityMaintainsBuyBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Upgrades Events Analyst Ratings Tech Trading Ideas Best of Benzinga


Related Articles (AAPL)

View Comments and Join the Discussion!

Latest Ratings

CGBDJP MorganUpgrades15.5
NLYJP MorganUpgrades10.5
NTNXMorgan StanleyUpgrades58.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
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.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Needham: CBS Is Building The Next Netflix

iRobot Shares Drown As SharkNinja Dips Its Fin In Robotic Vacuums