Courtesy of Benzinga.
Longbow’s Shawn M. Harrison believes Apple Inc. (NASDAQ: AAPL) is undervalued, especially given the backdrop of “stabilizing iPhone demand, a growing subscriber base that aids in AAPL’s ability to monetize its ecosystem, optionality from the notable jump in R&D spend, and sizeable free cash generation.”
Harrison maintains a Buy rating on the company, with a price target of $130.
iPhone 7 Production
Checks with contacts and Longbow’s connector checks suggest continuing flat iPhone 7 production year-over-year, with upside to the iPhone SE production.
The production of the iPhone 7 is in full swing, the analyst mentioned, while adding that contacts expect a flat initial build year-over-year versus the iPhone 6s.
“iPhone 6s production cuts are continuing into the September quarter, albeit with a steeper drop of 40 percent than previously anticipated,” Harrison stated.
iPhone SE Production
On the other hand, iPhone SE production is expected at more than 7 million units for CYQ3 versus the previous expectations of 5 million units, with some contacts expecting upside to 9 million units for the quarter.
Excluding Apple’s extra week, Harrison estimates a 4 percent decline in iPhone shipments for CYH2, with a 9.5 percent decline for CY16.
According to the Longbow report, “While a glossed over topic during earnings season by AAPL’s suppliers, greater than typical price downs is the talk of AAPL’s supply chain. Contacts continue to call out greater annual iPhone price downs of 10–20 percent with almost everyone in the supply chain involved including AAPL’s contract manufacturing partners.”
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Latest Ratings for AAPL
Date | Firm | Action | From | To |
---|---|---|---|---|
Aug 2016 | RBC Capital | Maintains | Outperform | |
Aug 2016 | Daiwa | Downgrades | Buy | Outperform |
Jul 2016 | Hilliard Lyons | Upgrades | Long-term Buy | Buy |
View More Analyst Ratings for AAPL
View the Latest Analyst Ratings
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