Neil Hughes
Investment firm Canaccord Genuity raised its price target on shares of Apple to $135 on Tuesday, citing its latest survey showing supply constraints for the higher-capacity iPhone 6 and iPhone 6 Plus, signaling higher average selling prices and greater profits for the company's handset division.
In a note to investors, a copy of which was provided to AppleInsider, analyst Michael Walkley revealed the results of his latest November smartphone survey, which shows continued strong demand for both the iPhone 6 and iPhone 6 Plus. In particular, Apple has still not caught up with demand for the larger-capacity 64- and 128-gigabyte models.
With continued demand for more storage, Walkley has increased his average selling price assumptions for the iPhone, as well as his overall Apple estimates. He now predicts that the iPhone will have an average selling price of $700, on sales of 63 million units, in the December quarter.
Walkley's survey found that the 4.7-inch iPhone 6 was the top-selling handset at the major four U.S. carriers in November — Â AT&T, Verizon, Sprint and T-Mobile. Taking second place was the 5.5-inch iPhone 6 Plus, while the Samsung Galaxy Note 4 came in third.
A survey of 75 AT&T stores conducted by Canaccord Genuity on Nov. 26 found that 44 percent had the 16-gigabyte iPhone 6 in stock, but just 8 percent had the 64-gigabyte model, and none had it in a 128-gigabyte capacity.
Store representatives for all four carriers indicated that the 64-gigabyte capacity has proven extremely popular with consumers. Those models are said to remain constrained, with wait times stretching as long as a few weeks depending on the carrier and iPhone model.
With strong demand for more expensive iPhone models, Walkley has increased his price target on AAPL to $135, with a fiscal 2015 earnings per share estimate of $8.50. He also believes consumer preferences for higher-capacity, more expensive iPhone models will continue for future upgrade cycles, allowing Apple to reap the benefits for years to come.
"We believe Apple will continue to garner the majority share of handset industry profits and maintain and even grow its share of high-end smartphone market with the new larger screen SKUs continuing to sell well," the analyst wrote. "In fact, based on our analysis, we believe Apple dominated the handset industry operating profits and captured a remarkable 86% of (third-quarter) 2014 handset industry profits and should grow its share of industry profits during Q4/2014."
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41 Comments
Pacific Crest downgraded the stock and Deutsche Bank put out a cautious research note. Probably why the stock is down today when the overall market is up. Will these guys have egg all over their faces two months from now? http://seekingalpha.com/news/2155815-apple-lower-following-cautious-pac-crest-deutsche-notes
Pacific Crest downgraded the stock and Deutsche Bank put out a cautious research note. Probably why the stock is down today when the overall market is up. Will these guys have egg all over their faces two months from now?
http://seekingalpha.com/news/2155815-apple-lower-following-cautious-pac-crest-deutsche-notes
I have to wonder who's profiting from the Deutsche Bank analyses. They've been consistently negative about Apple for some time.
Pacific Crest downgraded the stock and Deutsche Bank put out a cautious research note. Probably why the stock is down today when the overall market is up. Will these guys have egg all over their faces two months from now?
http://seekingalpha.com/news/2155815-apple-lower-following-cautious-pac-crest-deutsche-notes
I read the downgrade. It appears that they realize there will be substantial growth in the current quarter. They are basing their analysis on future quarters.
At least this helps to explain yesterday's sharp decline. I thought it was more than just automated trading.
People in the biz will tell you that the tech industry is not for the faint of heart. That it is volatile, and un-understandable.
I don't think investors who have dealt with different industries get the tech industry (not that I do BTW). So I suspect that is why you will get such a disparity in predictions. They're throwing darts, in the dark, at a board that is moving and may or may not be there.
So you get a lot of the 'broken clock is right twice a day' phenomenon, but just because Deutche Bank or Pac Crest get it right once doesn't mean they understood why they were right.
I guess my point is- it's really hard to find someone who understands the tech industry enough to make these kind of predictions. Add to that some subconscious emotional investment in companies like Apple and things really get skewed.
My view is that the tech segment changes so much that what makes a good company is one that can roll with or even create these changes. Being willing to embrace the new stuff when it's viable and cut off the old stuff when it's not. So far I trust Apple to do this, and you can see what happens to the companies that don't.
I'm no expert BTW. Which is probably obvious. But the 'experts' out there aren't either.
[quote name="island hermit" url="/t/183684/as-apple-still-struggles-to-meet-iphone-6-demand-canaccord-raises-price-target-to-135#post_2646539"] I read the downgrade. It appears that they realize there will be substantial growth in the current quarter. They are basing their analysis on future quarters. At least this helps to explain yesterday's sharp decline. I thought it was more than just automated trading. [/quote] Except Pacific Crest has been bearish on Apple for a while. I see the stock is rebounding a bit - was down over $2, now down about 20 cents.