FBR Capital Semiconductor Trading Tidbits: Apple (AAPL) Supply Chain Update
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Price: $309.35 -0.63%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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FBR Capital Semiconductor Trading Tidbits: BRCM, QCOM, and INTC
FBR analyst says, "Apple (Nasdaq: AAPL) supply chain update: iPhone and iPad builds revised higher as component constraints ease; iPhone 4GS volumes down as ramp pushes slightly. We have an interim update into the Apple supply chain with implications for Broadcom (Nasdaq: BRCM)(OP-rated), Intel (Nasdaq: INTC)( OP-rated), Qualcomm (Nasdaq: QCOM)(OP-rated), and other non-covered firms including Omnivision, Samsung, and Taiwan Semiconductor. For the iPhone, our
contacts believe 2Q11 production estimates were revised upwards by 4% or 900k units to 21.0M units, as some materials supply constraints have eased recently. 3Q11 iPhone builds were revised up 3.6M units to 23.5M units (+13% QOQ), however iPhone 4GS builds are now expected to be 5.5M units, below our prior estimate of 8.0M units as the iPhone 4GS ramp pushes out a bit. We expect a post-
Labor Day product announcement and shipments to begin ramping in mid- to late-September. As we said was likely, iPad 2 bottlenecks are easing somewhat (though not totally), with 2Q11 builds at 8.5M units (a 40% positive revision versus prior checks) and 3Q11 builds at 8.0M units (a 50% positive revision versus prior checks) as touch panel makers have increased supply, and as Hon Hai's yield rates have improved. Net, this data suggests Apple is again contributing to growth at Broadcom and other component suppliers. Regarding chip stocks, we are constructive on the group for a mid-August through year-end rally as business generally remains solid, inventories are appropriate, and valuations still seem reasonable (12x 2011 P/E for the sector). That said, the group does seem catalyst-light currently with some order choppiness in the handset and optical space, sluggish unit demand in the PC space, and
Japanese earthquake impacts still looming overhead. We think the SOX could churn sideways in range of 390-460 through this summer, before breaking out toward 525 by year-end, with stocks currently approaching the lower end of their trading range. Key stocks to focus on for potential upside include Outperform-rated BRCM, Maxim (Nasdaq: MXIM), QCOM, Int'l Rectifier (NYSE: IRF), ON Semi (Nasdaq: ONNN), and Marvell (Nasdaq: MRVL)."
FBR analyst says, "Apple (Nasdaq: AAPL) supply chain update: iPhone and iPad builds revised higher as component constraints ease; iPhone 4GS volumes down as ramp pushes slightly. We have an interim update into the Apple supply chain with implications for Broadcom (Nasdaq: BRCM)(OP-rated), Intel (Nasdaq: INTC)( OP-rated), Qualcomm (Nasdaq: QCOM)(OP-rated), and other non-covered firms including Omnivision, Samsung, and Taiwan Semiconductor. For the iPhone, our
contacts believe 2Q11 production estimates were revised upwards by 4% or 900k units to 21.0M units, as some materials supply constraints have eased recently. 3Q11 iPhone builds were revised up 3.6M units to 23.5M units (+13% QOQ), however iPhone 4GS builds are now expected to be 5.5M units, below our prior estimate of 8.0M units as the iPhone 4GS ramp pushes out a bit. We expect a post-
Labor Day product announcement and shipments to begin ramping in mid- to late-September. As we said was likely, iPad 2 bottlenecks are easing somewhat (though not totally), with 2Q11 builds at 8.5M units (a 40% positive revision versus prior checks) and 3Q11 builds at 8.0M units (a 50% positive revision versus prior checks) as touch panel makers have increased supply, and as Hon Hai's yield rates have improved. Net, this data suggests Apple is again contributing to growth at Broadcom and other component suppliers. Regarding chip stocks, we are constructive on the group for a mid-August through year-end rally as business generally remains solid, inventories are appropriate, and valuations still seem reasonable (12x 2011 P/E for the sector). That said, the group does seem catalyst-light currently with some order choppiness in the handset and optical space, sluggish unit demand in the PC space, and
Japanese earthquake impacts still looming overhead. We think the SOX could churn sideways in range of 390-460 through this summer, before breaking out toward 525 by year-end, with stocks currently approaching the lower end of their trading range. Key stocks to focus on for potential upside include Outperform-rated BRCM, Maxim (Nasdaq: MXIM), QCOM, Int'l Rectifier (NYSE: IRF), ON Semi (Nasdaq: ONNN), and Marvell (Nasdaq: MRVL)."
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