Apple (AAPL) iPhone Estimates Raised at Credit Suisse

September 15, 2016 6:50 AM EDT
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Credit Suisse analyst Kulbinder Garcha is raising Apple (NASDAQ: AAPL) iPhone and EPS estimates Thursday following positive data from their team in Japan today around iPhone builds, recent announcements from TMobile and Sprint, and their proprietary iPhone survey. They believe a number of recent data points suggest a better than expected iPhone 7 cycle, in both volume and mix. In addition, Garcha said conversations with display suppliers support their iPhone 8 super cycle thesis.

The firm raise raised CY16/17 EPS by 3%/3% to $8.22/$10.09, from $7.95/$9.84. "Given high retention rates, a superior ecosystem and a multi-product compute advantage, we believe FCF of ~$67bn should be sustainable LT," the analyst said.

Further, the firm now projects CY16/17 iPhone volumes of 215mn (-7% yoy)/ 221mn (+3% yoy), up from 208mn (-10% yoy)/ 217mn (+5% yoy). They now estimate F4Q16/F1Q17 units at 48mn (+19% q/q, +0% y/y) /75mn (+56% q/q, 0% y/y), noting a 14 week December quarter. Also, they maintain CY18 estimates at 249mn units (+13% yoy), as conversations with display suppliers support the firm's iPhone 8 super cycle thesis.

The firm maintained an Outperform rating and price target of $150 on AAPL.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $111.77 yesterday.



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