Apple (AAPL) PT Raised to $150 at Canaccord Genuity on Strong Demand for iPhone 12

Canaccord Genuity analyst T. Michael Walkley raised the price target on Apple (NASDAQ: AAPL) to $150.00 (from $145.00) while maintaining a Buy rating after increasing iPhone estimates on strong demand for the iPhone 12 products.

The analyst commented, "Apple is continuing to demonstrate the strength of its product ecosystem, and we anticipate ongoing strong double-digit growth for Macs, iPads, and services. With strong demand for the new iPhone 12 products, we are increasing our iPhone estimates and price target to $150. While we anticipated iPhone sales would return to year-over-year growth in Q1/F’21 despite the delayed and staggered launch of the iPhone 12products versus the strong iPhone 11 launch last year, we anticipate iPhone sales could reach double-digit growth despite the tough comparable. We still anticipate double-digit growth for all hardware products during the seasonally strong Q1/F21, demonstrating the strength of Apple’s ecosystem. We believe Apple is well-positioned to benefit from the 5G upgrade cycle with its slate of new phones exiting Q1/F21 and anticipate strong overall growth trends as 5G smartphones ramp and Apple continues to grow its installed base and higher-margin services revenue. Apple’s ecosystem approach, including an installed base that exceeds 1.6B devices globally, should continue to generate strong services revenue, and we expect the higher-margin services revenue growth to outpace total company growth. With $79B in net cash, Apple has a strong balance sheet to continue to invest and support long-term growth. With the 5G upgrade cycle likely a benefit during 2021, other hardware categories growing double-digits, and continued mix shift toward high-margin services, we believe the share price is compelling for longer-term investors. We reiterate our BUY rating and increase our price target to $150 based on our raised estimates"

The firm is increasing Q1/F’21 iPhone estimate from69M units to 75.5M units and C2021/C2022 iPhone unit estimates from 223M/234Mto 233M/244M.

They have updated their mix a bit more toward the iPhone 12 from the 12Pro and Max models, resulting in total Q1/F’21 iPhone revenue estimate to increase from $56.9B to $59.7B and C2021/C2022 iPhone revenue estimates from $173.0B/$170.0B to $173.9B/$175.7B.

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