Evercore ISI Reiterates Outperform Rating on Apple (AAPL)

Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and $260.00 price target on Apple (NASDAQ: AAPL).

The analyst comments "ALL YOU NEED TO KNOW: The fourth-generation iPhone SE is expected to be released sometime around March (expecting an announcement in mid/ late February). We think this could modestly bolster growth in Mar-qtr but be more material as units ramp-up in Junqtr and Sept-qtr. Our sense is that the iPhone SE (4th gen) will feature notable hardware upgrades and come with a slightly higher price tag of $499 (vs. $429 for the last launch, 3rd gen). The launch could be an incremental tailwind for Apple, replicating prior cycles of SE shipments with ~20M+ units sold in its first year. At a blended ASP of ~$540, shipments at this volume could generate an additional ~$12B in annual revenues (approx. ~3% of Apple’s total sales). Assuming standard product operating margins, we see the SE contributing ~20-25c to EPS (~3% of EPS upside). Key Points: 1) New Hardware = Higher Margins: We think Apple could formally insource baseband and combo chips for the SE, which should provide a sizable GM tailwind for them and help offset higher DRAM cost. 2) A Justified Price Hike: Though the starting price of the new SE (~$500) is expected to be higher than the previous model, the price point is still lower than Apple’s overall iPhone ASP (>$900). 3) More Than Just a Refresh: We expect the fourth generation to feature multiple improvements and upgrades, including Apple Intelligence. 4) New Markets to Provide Upside: Emerging markets are becoming a notable growth tailwind for Apple. As a lower-price iPhone, the SE may appeal to more consumers and further drive the doubledigit growth Apple has been seeing in its installed base. Net/net: Considering historical patterns around the previous generations of the iPhone SE and our assessment of current demand for a more affordable iPhone, we believe Apple could see revenue contributions from the new SE reaching $12B or higher."

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 $244.60 yesterday.

You May Also Be Interested In

• Apple (AAPL) Siri Chief Calls Delays 'Ugly' In Meeting, Promises Fixes - Bloomberg
• Bath & Body Works, Inc. (BBWI) Files Mixed Shelf
• Scholar Rock Holding Corp. (SRRK) announces employee inducement grants