FBN Securities reaffirms Apple (Nasdaq: AAPL) at Outperform and moves its price target from $160 down to $150 following Q3 results reported after markets closed on Tuesday.

Analyst Shebly Seyrafi, CFA, noted that strong iPhone and China sales countered weaker iPad and Apple Watch sales.

Seyrafi commented, iPhone sales again were strong, with revenue of $31.4B (63 percent rev.) up 59 percent Y/Y, with units of $47.5B up 35 percent Y/Y and with ASP of $660 (flat Q/Q) up 18 percent Y/Y helped by strong sales of the iPhone 6 and 6+. We estimate that iPhone sell-through was $48.1B, up 36 percent Y/Y, so iPhone metrics were strong all around. iPad and Apple Watch, however, disappointed.

iPad revenue of $4.5B declined by 23 percent Y/Y while iPad units of 10.9M declined by 18 percent Y/Y (as did iPad sell-through). AAPL does not explicitly break out Apple Watch, but Apple Watch is included in Other Products where revenue of $2.6B missed our $3.1B estimate. We estimate that AAPL sold 2.3M Watches, below the 3.9M consensus, as AAPL was negatively impacted by the delayed availability of the Watches until mid-June. (The Watch is now available in 19 countries.)

We are quite impressed by AAPL’s sales growth in Greater China where sales of $13.2B grew by 112 percent Y/Y (accelerating from 7-71 percent Y/Y growth over the prior two quarters) and accounted for 29 percent rev., up from 17 percent the year before, Seyrafi noted.

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