iPhone consensus 'too high' for Q4 but iPhone 12 will drive growth through 2021, analyst says

Morgan Stanley is warning investors of a potential iPhone revenue miss for the September quarter but continues to believe that the iPhone 12 will drive growth in the future.

In a note to investors seen by AppleInsider, lead analyst Katy Huberty believes that current aggressive iPhone expectations "don't fully account for the lack of new products" in the September quarter. She adds that current iPhone consensus for the period of 40.4 million shipments is "too high."

That's because the iPhone 12 and iPhone 12 Pro models launched too late to impact the quarter. Despite that, iPhone SE and iPhone 11 performance bodes well for Apple, and Huberty has raised its September quarter revenue and earnings-per-share estimates 2% and 4%, respectively.

Based on Apple's older iPhone models' performance, Huberty has raised its September iPhone revenue forecast to $22.9 billion on 33 million shipments. That's below iPhone revenue consensus of $28.5 billion and shipment consensus of 40.4 million units for the quarter.

Huberty adds that investors are likely to "brush aside" the September quarter iPhone results, given the focus on the new iPhone 12 models. And while she notes it's a bit too early to place bets, initial lead time indicators are promising for the lineup.

As of Oct. 20, iPhone 12 and iPhone 12 Pro lead times clock in at 18.5 days for the iPhone 12 Pro and 10.1 days for the iPhone 12, up from early delivery date slippage. That puts the lineup third behind the iPhone X and iPhone 11 Pro and iPhone 11 Pro Max at this point in their respective cycles.

The analyst notes that anecdotal reports from Apple's supply chain indicate that demand for the iPhone 12 is much higher than past generations.

Huberty has also raised Morgan Stanley's Apple Services estimates to 14.5 billion, up 2%. Overall, the bank predicts Apple's September quarter revenue of $60 billion and earnings-per-share estimates of $0.62.

The investment bank maintains its 12-month AAPL price target of $136, based on a 5.9x enterprise value-to-sales multiple on Apple's product business and a 10.5x EV/Sales multiple on Apple's Services business. That results in a 6.7x EV/Sales multiple for 2021 and a target 33.3x price-to-earnings multiple for that year.

Shares of AAPL were trading at $115.13 on Thursday morning, down 1.49% in intra-day trading.