Neil Hughes
Apple's flagship OLED "iPhone 8" could help push shares of the company as high as $170, investment firm UBS believes, issuing a note to investors on Tuesday saying that 2018 earnings per share will likely exceed market consensus expectations.
Analyst Steven Milunovich of UBS said that Wall Street is currently calling for Apple to see $10.50 earnings per share in fiscal year 2018 — a number he thinks will be achievable with the anticipated high-end "iPhone 8."
Milunovich's estimates, seen Tuesday by AppleInsider, assume the OLED handset will ship in November with a starting price of $900 for 64 gigabytes of capacity. He also thinks Apple will offer a 256-gigabyte version for $1,000.
UBS's forecasts see iPhone unit sales growing 15 percent in fiscal year 2018, driven by strong demand for the flagship "iPhone 8."
Notably, a $900 starting price would actually be lower than rumored, with some reports claiming the starting price of the redesigned iPhone could exceed $1,000. UBS, however, is skeptical that Apple would charge that much.
"Although a higher OLED price is possible, Apple typically doesn't price too far above high-end competition," Milunovich wrote.
For Apple's 2018 EPS, Milunovich has presented three possible scenarios. In one, the OLED "iPhone 8" sees strong demand and is accompanied by a lower entry price for the mid-tier "iPhone 7s." With an average selling price of $680 and flat gross margin, he sees earnings per share at $10.65.
Another, bearish scenario could see demand for the OLED iPhone being lower than expected, perhaps due to high pricing. With a lower average selling price and gross margins, he could see EPS dropping to $10.45.
Finally, the optimistic case calls for strong OLED demand and no price cut on the LCD "iPhone 7s." In that scenario, he predicts EPS could go as high as $11.90.
Milunovich has maintained a "buy" rating for shares of AAPL with a price target of $170.
Christine McKee
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7 Comments
I'm sure 8 will do just fine, the better it does the lower AAPL will go! lol. BTW ... As I wrote in the post about the scare of a $1,200 only version ... it's most likely (and just guessing as I'm not an analyst therefore don't 'know stuff for sure') there will be a range of prices for various configurations. That doesn't seem like brain surgery to me.
The iPhone SE is popular with a segment of customers like me. I continue to believe that Apple would have a small hit on their hands if they offered an iPhone XL same size of the iPhone 7 in width and height but 50% thicker to accommodate a much thicker battery (hopefully 2 days capacity), a headphone jack, the dual camera. And Like the SE it could be released in the Spring. I think Apple could easily charge $800 for this.