Sell-Side Expectations For The iPhone 7
Apple Inc. (NASDAQ: AAPL) is expected to introduce the iPhone 7 on Wednesday. Here's a cheat sheet that contains seven of the most notable sell-side and media related expectations for the launch.
DigiTimes: Apple Underestimated Demand?
According to a DigiTimes report, Apple revised its parts and components orders with members of its supply chain higher by 10 percent. Sources close to the matter indicated that "Apple still remains positive about replacement demand."
Bullish On Apple's Stock, Not The iPhone
Credit Suisse's Kulbinder Garcha maintained an Outperform rating on Apple's stock with a $150 price target even though the analyst expects the iPhone 7 cycle to be muted. However, the analyst is projecting a "Super Cycle" in 2018 which justifies the longer-term bullish story.
Buy Apple, Not Apple's Component Makers...
Pacific Crest's Andy Hargreaves cautioned investors against owning shares of companies that supply components to Apple. The analyst noted that Apple's component suppliers will "struggle to outperform" as iPhone 7 component orders are likely to be 15 to 20 percent lower compared to the iPhone 6s.
...Buy The Component Makers
Morgan Stanley's Jasmine Lu maintained a bullish stance on companies within the PC and Notebook supply chain. The analyst noted that the iPhone build rate estimates for the third and fourth quarter remain at 44 million and 72 million, respectively. This represents a 10 percent quarter-over-quarter and 64 percent quarter-over-quarter growth.
Don't Forget About The iPhone SE
While all the attention may be focused on the iPhone 7, production of the iPhone SE is expected to be more than 7 million units in the third quarter compared to expectations of 5 million units, according to Longbow's Shawn Harrison. In fact, some of the analyst's contacts are even expecting upside to 9 million units in the quarter.
RBC Boosts Prior Estimates
RBC Capital's Amit Daryanani raised his December quarter iPhone unit estimate by an incremental 5 to 6 million units. The analyst is now expecting Apple's total iPhone units shipped in the December quarter to be 79 million, representing 6 percent year-over-year unit growth.
Apple Will 'Underperform Perpetually'
Steve Grasso, director of institutional sales at Stuart Frankel, told CNBC that investors jump on the Apple bandwagon "when it serves their purpose" but also "love to hate it when it serves their purpose as well." He added that Apple's stock has "benefited from everyone getting pushed into the market" and investors should be a seller on any short-term strength given the fact that "iPhone sales as a whole are decreasing."
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