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Analysts Take The Measure Of Apple's iPhone X

Analysts Take The Measure Of Apple's iPhone X
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Apple Inc. (NASDAQ: AAPL), which has emerged as a Wall Street darling, sent sell-side into a tipsy with its long-awaited launch of its next iteration of iPhone, code named the iPhone X. Up until now, rumors were flying thick and fast concerning its features, functionalities, pricing, etc.

Therefore, the launch event was a platform for analysts to compare the product and its varied facets against expectations. Here's a compilation of what the sell side thought about the newest model of Apple's iPhone.

iPhone X Was Disappointing – KeyBanc

Keybanc Capital Markets analysts Andy Hargreaves, Evan Wingren and Tyler Parker viewed the iPhone X launch event as largely neutral. With the device offering little they view as compelling enough to justify the $300 premium over the iPhone 8, the analysts lowered their expected mix of iPhone X.

The firm thinks the disappointment raises the risk of Apple struggling to drive incremental upgrade activity in future cycles.

The firm maintains its Sector-Weight rating on Apple.

See also: One Way To Play iPhone Momentum: Lumentum

Pricing A Bit Higher Than Expected – UBS

UBS analyst Steven Milunovich sees the pricing of the iPhone as a bit higher than he expected. The analyst opines that the higher pricing might be due to the company's belief that innovation warrants higher prices.

The analyst noted that the iPhone X was priced at $999/$1,149 and the iPhone 8 price was bumped up by $50.

"Our EPS estimate of $11.15 does not change at an iPhone ASP of $724 on an iPhone X contribution of 35%," the analyst said.

However, longer term, UBS thinks Apple made a positive statement regarding future capabilities, including AR potential, a better charging experience and more control over its technology.

UBS rates Apple a Buy, with a $180 price target on the shares.

iPhone Lives Up To Lofty Expectations – Piper Jaffray

Piper Jaffray analyst Michael Olson said Apple generally met the lofty expectations for a device with a relatively more robust set of upgraded features.

The analyst said the change in the form factor to edge-to-edge OLED screen, and 3D Sensing, which enables facial recognition, were the standout changes. The disappointment with the iPhone X, according to the analyst, was with the timing of its shipments, expected around Nov. 3.

Piper Jaffray recommended owning Apple shares on the potential for a strong iPhone cycle and favorable services trajectory.

The firm maintains its Overweight rating and $190 price target on the shares of Apple.

We Maintain Our Conviction On Apple – Loop Capital Markets

Loop Capital Markets said it maintains its conviction for a bit of upside to Street consensus revenue, gross margin and EPS estimates through calendar 2019. Analyst Ananda Baruah thinks iPhone 8 & X volume pushouts into calendar 2018 ironically set up Apple for increasingly accelerating revenue growth.

"Being long allows investors to capture some near-term appreciation (plus a 1.7% dividend) while remaining positioned to play any potential iPhone 8 & 10 (X) so-called echo or super-cycle through calendar 2018," the analyst said.

Though there have been fears that the anticipated delay in shipments might impact the unit shipment numbers for the December quarter, the firm thinks Apple can still make it, if pre-order activity is as expected and Apple has component supply.

The firm reiterated its Buy rating and $180 price target on the shares of Apple.

iPhone Release Consistent With Expectations – Canaccord Genuity

Canaccord Genuity said the iPhone release was consistent with its expectations. The firm sees a strong iPhone upgrade cycle. Analyst Michael Walkley said the compelling features in the iPhone X model included OLED screen, improved battery life, wireless charging with the Qi standard and overall improved functionality.

The analyst expects iPhone replacement rate to be 32.4 percent in 2018, up from 28 percent in 2017, with iPhone shipments expected to be 250 million in the calendar year 2018.

Canaccord Genuity has a Buy rating and $180 price target on the shares of Apple.

Related News: Apple Nears $1 Trillion Valuation; Here's The Story Of The Company First To Break The $1 Billion Mark

Latest Ratings for AAPL

Jan 2019CitigroupMaintainsBuyBuy
Jan 2019NomuraMaintainsNeutralNeutral
Jan 2019Canaccord GenuityMaintainsBuyBuy

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