Jefferies Said Apple (AAPL) Gross Margin Concerns Are Overblown, Sees Potential $300 iPhone
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Price: $305.93 +0.22%
Rating Summary:
44 Buy, 29 Hold, 9 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
44 Buy, 29 Hold, 9 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies reiterated their Buy rating and $500 price target on Apple (NASDAQ: AAPL) saying concerns over serious gross margin deterioration are overdone.
Commenting on gross margins, analyst Peter Misek sees upside to his CQ2 est and over the next year a floor of 35% and a likely range of 37%-40%. Misek estimates approximately 50% gross margin overall for iPhones and said iPad margins on high-end SKUs could be over 30%. "We believe that AAPL should enjoy sustainable margins of 35% to 40% over the medium term," he said.
Misek also believes iPhone units will re-accelerate, citing: : 1) New lower-cost iPhone, 2) iPhone 4S in the Fall followed by iPhone 5 in June 2012, 3) More carriers.
On a new low-cost iPhone, the analyst said Apple could enter the smartphone mid-market with a $300 iPhone with margins around the current corporate average. "Our checks increasingly point to a launch within the next 6-18 months. We believe that this will increase AAPL's TAM by an additional 500M phones per year," he said.
"We believe the the new low-cost iPhone at a $300 ASP and $180 all-in COGS will add ~$1 of EPS for every 10M phones sold," he continued.
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $347.83 yesterday.
Commenting on gross margins, analyst Peter Misek sees upside to his CQ2 est and over the next year a floor of 35% and a likely range of 37%-40%. Misek estimates approximately 50% gross margin overall for iPhones and said iPad margins on high-end SKUs could be over 30%. "We believe that AAPL should enjoy sustainable margins of 35% to 40% over the medium term," he said.
Misek also believes iPhone units will re-accelerate, citing: : 1) New lower-cost iPhone, 2) iPhone 4S in the Fall followed by iPhone 5 in June 2012, 3) More carriers.
On a new low-cost iPhone, the analyst said Apple could enter the smartphone mid-market with a $300 iPhone with margins around the current corporate average. "Our checks increasingly point to a launch within the next 6-18 months. We believe that this will increase AAPL's TAM by an additional 500M phones per year," he said.
"We believe the the new low-cost iPhone at a $300 ASP and $180 all-in COGS will add ~$1 of EPS for every 10M phones sold," he continued.
For more ratings news on Apple click here and for the rating history of Apple click here.
Shares of Apple closed at $347.83 yesterday.
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