Ready, set, launch. After much anticipation, Apple (AAPL) announced that its iPhone 12 launch will take place virtually on October 13, with the phones becoming available for purchase in late October.
Weighing in on the development for Wedbush, 5-star analyst Daniel Ives sees a spike around production and pent up demand for the lineup of iPhone 12 models (four new models are expected) set to be unveiled.
This is especially apparent when it comes to AAPL’s Asian suppliers, which are anticipating major demand for the larger 6.7-inch model, “raising the overall iPhone 12 expectations heading into this ‘once in a decade’ potential launch.”
Expounding on this, Ives stated, “We continue to believe the line in the sand a few months ago was between 65 million to 70 million 5G iPhone 12 units and now has moved into the 75 million-plus range with 80 million a stretch goal. Importantly, with our estimation that 350 million of 950 million iPhones worldwide are currently in the window of an upgrade opportunity, we believe this will translate into an unprecedented upgrade cycle for Cook & Co.”
As for the “key ingredient in Apple’s recipe for success,” Ives points to demand in China, with the analyst estimating that approximately 20% of iPhone upgrades will come from the region in the year ahead. “To this point we are seeing considerable strength from the China region over the last few months with positive trends heading into the Fall, an impressive trajectory we expect to continue heading into the next six to nine months,” he explained. What’s more, Ives doesn’t think the WeChat ban will cause a disruption.
Adding to the good news, demand from India is also surging, which is “an important trend to watch as this region could translate into some surprising iPhone units upside as Apple heads into this key launch period,” in Ives’ opinion.
All of the above prompted Ives to comment, “Taking a step back we believe iPhone 12 represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment, in our opinion.”
In line with his optimistic approach, Ives stayed with the bulls. To this end, he reiterated an Outperform (i.e. Buy) rating and $150 price target. Investors could be pocketing a gain of 33%, should this target be met in the twelve months ahead. (To watch Ives’ track record, click here)
Turning to the rest of the Street, the bulls represent the majority. With 24 Buys, 8 Holds and 3 Sells assigned in the last three months, the word on the Street is that AAPL is a Moderate Buy. At $122.06, the average price target implies 6% upside from current levels. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
On Tuesday, Apple (AAPL) sent out invitations for an October 13 event named “Hi, Speed,” keeping the happening’s content under wraps. However, it is not hard to deduce from its name that Apple is alluding to the performance expected from its flagship product - the next gen iPhone 12, Apple’s first handset to boast 5G capabilities - and will therefore announce the product’s launch at the event.
Reading between the lines, Deutsche Bank analyst Jeriel Ong arrives at the same conclusion. Although the analyst adds it “remains somewhat speculative when exactly iPhones will be available for sale after this event,” going by past announcements Ong assumes “a 10-day rule is appropriate.” This suggests the coveted product could hit the shelves on the weekend of 10/23-10/25 which will provide roughly 10 weeks of iPhone sales for the December quarter.
The tech giant usually reserves its new iPhone launch for September, however, due to the pandemic’s disruption of supply chains, this year’s event has been pushed back.
Apple has announced earnings for October 29, which brings up an interesting point, Ong notes. In contrast to the typical 5-6 weeks of new iPhone sales data Apple usually has at its disposal to provide a quarterly guidance, they may only have a week of new iPhone sales data to base forward estimates on.
“Since the pandemic began, AAPL has elected not to provide guidance, and we wonder whether they will continue to omit quarterly guidance as a result of the delayed iPhone launch and the subsequent lack of visibility they have in forecasting,” Ong further added.
By now, investors and the wider tech community know more or less what to expect from the launch; Two "iPhone 12" and two "iPhone 12 Pro" models, should be unveiled. Ong expects screen sizes will include a 5.4" model, claiming the smaller offering “could be popular given AAPL's propensity to gravitate towards higher screen sizes in recent years and eschew smaller form factors.”
Overall, Ong sticks to his Buy rating on AAPL alongside a $140 price target. Investors could be pocketing a 24% gain should Ong’s thesis play out in the year ahead. (To watch Ong’s track record, click here)
Most of Ong’s colleagues retain a bullish stance. Based on 24 Buys, 8 Holds and 3 Sells, the stock has a Moderate Buy consensus rating. However, going by the $122.06 average price target, the Street anticipates a modest upside of 6% from current levels. (See Apple stock analysis on TipRanks)
To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.