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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