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FBR Capital Defends Apple (AAPL) on Supply Chain Worries

November 10, 2015 11:39 AM EST
Get Alerts AAPL Hot Sheet
Price: $171.48 -1.06%

Rating Summary:
    39 Buy, 25 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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FBR Capital analyst Daniel Ives weighed in on Apple (NASDAQ: AAPL) following comments from Credit Suisse about sharp supply chain cuts, which has the stock down 2.4%.

Ives expects a very strong December quarter/holiday quarter on healthy iPhone 6s demand and legacy iPhone 6 shipments which will then see a natural tailoff in demand ahead of the blockbuster iPhone 7. Ives said many competitors are not capturing a major underlying demand for legacy iPhone 6 units, healthy ASPs, and Apple's leasing program which could comprise another 2%-3% of overall shipments based on their estimates.

Ives:

The usual "fire in a crowded theater" comments this morning from competitors are not a surprise to us as we saw the same knife fight develop going into the much contentious September quarter and Apple proved the skeptics wrong yet again. We expect a very strong December quarter/holiday quarter on healthy iPhone 6s demand and legacy iPhone 6 shipments which will then see a natural tailoff in demand ahead of the blockbuster iPhone 7 release we expect to be unveiled in September 2016. That said, we still think many competitors are not capturing a major underlying demand for legacy iPhone 6 units, healthy ASPs, and Apple's leasing program which could comprise another 2%-3% of overall shipments based on our estimates. Apple and Cook have a bullseye on their back and the Street continues to fire their predictable bearish bullets as investors fret about tough comps and the "iPhone 6 hangover" impact. We still believe that year over year iPhone growth will be the key in the December quarter with all eyes on "treading water" demand in March and June ahead of the seminal iPhone 7 release, coupled by positive growth from new products (iPad Pro, streaming, etc).

The firm maintained an Outperform rating and price target of $175.

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 $120.57 yesterday.



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