Wedbush Adds Apple (AAPL) to Best Ideas List

Wedbush analyst Daniel Ives is adding Apple (NASDAQ: AAPL) to the Wedbush Best Ideas List, saying the recent sell-off "creates a golden buying opportunity with a $3 trillion valuation on the horizon." The firm reiterated an Outperform rating, $175 price target, and $225 Bull Case.

"Coming off an historic December quarter for Apple in which the company crushed iPhone expectations, the Street has been anticipating some modest cuts to iPhone forecasts for FY21 and reflected in the stock's sell-off over the last month," Ives commented. "To this point, our recent Asia checks overall came in bullish yet again with 230 million+ units looking like the bogey for 2021 with an initial build forecast for iPhone 13 which could be a "game changer" indicating the supercycle party in Cupertino is going well in FY22."

The analyst sees the supercycle thesis playing out in FY21.

"While the Street is forecasting roughly 220 million iPhone units for FY21, we believe based on this current trajectory and in a bull case Cupertino still has potential to sell north of 240 million units (~250 million could be in the cards - an eye popping figure) which would easily eclipse the previous Apple record of 231 million units sold in FY15," the analyst commented. "Importantly, with our estimation that 350 million of 950 million iPhones worldwide are currently in the window of an upgrade opportunity, we believe is translating into an unprecedented supercycle upgrade cycle for Cook & Co."

Initial reads on iPhone 13 shows the iPhone supercycle party continues.

"We have gotten our first reads for iPhone 13 builds with this next iPhone launch coming out of Cupertino in the September timeframe. Initial Asia supply chain builds for iPhone 13 are currently in the ~100 million unit range compared to our initial iPhone 12 reads at 80 million units (pre-COVID) and represents a 25% increase YoY out of the gates."

On specs of the new iPhone, Ives said they have increased confidence that iPhone 13 will have a 1 terabyte storage option and will also include a number of enhancements with Lidar across all iPhone 13 models.

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 $119.85 yesterday.

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