With Apple (AAPL) iPad Mini, iPhone 5 On the Way Jefferies Lifts Target to $900

August 17, 2012 7:03 AM EDT Send to a Friend
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Jefferies' Peter Misek boosted his price target on Apple (NASDAQ: AAPL) from $800 to $900 after checks show the iPad mini has gone into production.

The firm notes Hon Hai's July revenues were +5% M/M, versus a typical seasonality of flat. "We believe Hon Hai is the main manufacturer of the iPad Mini. The new build plans of 25M and >30M for CQ3 and CQ4 compare to our current estimates of 16M and 18M, which do not include an iPad Mini."

Misek believes the 9/12 event likely will include the announcement of the iPhone 5, possibly of the iPad Mini, and less likely of the iTV.

"For the iPhone 5, we remain confident that by mid-September Apple will have ~15M in finished goods inventory. We believe 3GS, 4 and 4S builds continue into Q4. Pricing for all of those models has been slashed already. Total iPhone builds for H2:CY12 are well in excess of 80M vs. our estimate of 81M. We do not know if Apple will have a separate announcement event in Oct for the iPad Mini, and while we also think an iTV will be ready for a CQ4 launch, we do not know how many major product announcements Apple would want to cram into Sep/Oct/Nov and see a CQ1 launch as possible."

While Misek doesn't see the iTV announcement in September, he does believe it is in full production. "Recent data out of Sharp, Hon Hai, and other specialty chemical and TV component suppliers support this. Also, JDSU (Nasdaq: JDSU) noted that they have a new non-gaming customer for its gesture control modules. They indicated this is a new "living room" based customer."

Misek remains significantly above Street EPS for FY13 ($63 vs. St $52) and think the iPhone 5 will be the biggest handset launch in history.

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 $636.34 yesterday.




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