Apple (AAPL) PT Lifted to $120 at Susquehanna on Richer iPhone Mix

Susquehanna analyst Chris Caso raised his price target on Positive-rated Apple (NASDAQ: AAPL) to $120.00 (from $115.00) after raising estimates after checks showed that production forecasts for iPhone 6 Plus are significantly abovec earlier estimates.

"We conducted a fresh round of supply chain checks over the past few days in order to get a sense of how AAPL's supply chain has reacted to what appears to be a successful launch, and widespread shortages," Caso commented. "Our conclusion is that production forecasts for the iPhone 6 Plus are now significantly ahead of our earlier expectations, driven by a combination of strong demand and easing production constraints for the larger screens. In total, our iPhone unit assumptions for 2H14 are close to consensus expectations, and given higher production forecasts, we think some modest unit upside is possible. But we think the more significant driver of upside will be mix, resulting from more 6 Plus units, and a greater mix of the higher priced SKUs that contain more memory. We think consensus is far too conservative on those mix assumptions, and expect that to be a catalyst for the stock."

The firm's production forecast now suggests 100-110 mln iPhones to be produced in 2H14, up from an earlier estimate of about 100 mln units before the phones were launched. Importantly, they now expect more iPhone 6 Plus units to be produced versus earlier expectations, and we've added 9 mln units to their 2H14 production forecast for the 6 Plus/

C14 estimates move to $184.4 bln/$6.69 vs. $185.8 bln/$6.64 previously. December quarter EPS is $2.44 (vs. $2.37 consensus). C15 moves to $210.2 bln/$7.73, from $204.8 bln/$7.32 previously.

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 $99.62 yesterday.

You May Also Be Interested In

• Midday movers: PepsiCo, JetBlue fall; GM, Danaher and UPS rise
• East West Bancorp (EWBC) PT Raised to $90 at BofA Securities
• Sherwin-Williams (SHW) PT Lowered to $286 at BofA Securities, 'risk to valuation'