Apple Inc AAPL is expected to release a handful of new products at its upcoming "Wonderlust" event next week, but all eyes will be on the iPhone 15. Here's what to expect and why it matters for Apple stock.
What To Know: Morgan Stanley and Wedbush laid out expectations for the iPhone 15 launch ahead of the event next week.
Morgan Stanley analyst Erik Woodring anticipates limited "catch-up" upgrades for the iPhone 15 and 15 Plus models, but the analyst sees some bigger changes coming to the Pro models. Wedbush analyst Dan Ives shared similar expectations, including a strategic pricing move.
iPhone Pro and Pro Max updates could include thinner bezels, a new titanium casing and more rounded edges. Both analysts also expect Apple to enhance the camera quality by adding a new periscope lens, which will offer improved zoom capabilities. Ives called this the "star of the launch."
The smartphones are also likely to feature faster chips and a new "Action Button" which will allow users to run preselected functions without having to unlock their phones.
Other product launches could include new Apple Watch models and new AirPods, but again, everyone is focused on the new family of iPhones.
Check This Out: iPhone 15 Colors Leaked Ahead Of Launch - Uninspiring Or A Welcome Change?
Why It Matters: In a new note to clients, Woodring said he believes iPhone estimates for 2024 are too low.
"While the iPhone event has historically been a 'sell-the-news' event, we continue to see upside to Consensus and buyside expectations as FY24 tailwinds outweigh the headwinds," the Morgan Stanley analyst said.
Morgan Stanley's estimates for iPhone revenues next year are about 8% higher than the consensus. The firm is even higher than the Street on shipments for 2024.
"We believe that as FY24 iPhone expectations move higher, Apple can continue to outperform, as positive estimate revisions offset very moderate multiple compression," Woodring said.
Ives echoed much of the same sentiment. He noted that it's the right time for Apple to raise prices on its iPhones. The Wedbush analyst expects a $100 jump in base prices for the Pro models.
"Importantly, we expect some massive discounts/promotions from US carriers over the coming months which should further catalyze iPhone 15 sales out of the gates and take the sting of a slight price increase away," Ives said in a new note to clients.
This iPhone cycle is really a "golden installed base story," he said. Webush estimates that approximately 25% of iPhone users have not upgraded in four years, which sets the company up for a "mini super cycle."
Both Morgan Stanley and Wedbush have Overweight/Outperform ratings on Apple stock with price targets of $215 and $230, respectively.
The "Wonderlust" launch event is set to kick off at the Steve Jobs Theater in Cupertino, California on Sept. 12.
AAPL Price Action: At the time of publication, Apple shares were down 2.78% at $177.82, adding to losses for the week largely due to iPhone bans in China.
Photo: courtesy of Apple.
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