Apple touches record as brokerages bullish on iPhone X demand


FILE PHOTO: An attendee checks out a new iPhone X during an Apple launch event in Cupertino, California, U.S. September 12, 2017. REUTERS/Stephen Lam
FILE
PHOTO: An attendee checks out new iPhone X during an Apple launch
event in Cupertino

Thomson
Reuters


(Reuters) – Several badysts downplayed concerns about Apple
Inc’s iPhone X production issues and were bullish on demand and
sales, pushing the company’s shares to a record on Monday.

The Cupertino-based company does not provide pre-order figures on
iPhones, leaving investors and badysts in the dark in trying to
track output through research with its suppliers, consumer
surveys and other industry indicators.

But positive commentary from badysts on Monday signaled strong
demand for the pricey device with pre-orders starting this past
Friday.

Apple is scheduled to report quarterly results this Thursday. The
company provides sales figures in its results.

Since the launch of new iPhones on Sept.12, the stock had fallen
2.5 percent until last Thursday’s close. They rebounded on Friday
after Apple said pre-orders for the 10th anniversary phone were
“off the charts”.

The stock climbed to $168.07 earlier in the session, adding
nearly $26 billion to its market cap and inching it closer to
becoming the first company with a trillion dollar valuation.
Shares pared gains and were up 1.9 percent at $166.15 mid-day.

Daniel Ives, a well-known sector badyst, raised his forecast on
Monday for pre-orders by 10 million, and several other badysts
talked up sales over the next year.

In a note, Ives of research house GBH Insights, raised his
pre-order demand expectations for the iPhone X to 50 million
units from 40 million, calling the first stage of the iPhone X
release a “stellar success”.

“With the official launch of iPhone X in Apple retail stores
slated for this Friday, Nov. 3, we anticipate very high demand
globally with limited supply of iPhone X on hand,” Ives said.

Jeffrey Kvaal from brokerage Nomura Instinet, said Apple and U.S.
wireless carriers’ pushing out of delivery times for iPhone X
orders to 5-6 weeks was longer than for previous phones and
pointed to strong demand.

Asked by Reuters whether production bottlenecks are causing
shipment delays, Tigress Financial Partners badyst Ivan Feinseth
responded: “No, there’s no bottlenecks. This is a company that
manages the supply chain well.”

However, Drexel Hamilton badyst Brian White, cautioned that the
longer wait times for consumers ordering phones may be as much
due to the component supply issues, which led Apple to delay the
launch of the premium phone until November.

“Although we believe Apple is benefiting from strong demand from
the iPhone X, the company is also struggling with supply
constraints,” White, who has a buy rating on Apple, said.

“A sound debate around the key driver for the surging shipping
lead times can be made by reasonable people. Thus we believe it
was important for Apple to highlight the demand side of the
equation for the iPhone X.”

Wall Street is bullish on Apple with 31 of 38 brokerages rating
the stock “buy” or higher. Their median price target of $180
projects a market cap of nearly $930 billion for the iPhone
maker.

(Reporting by Arjun Panchadar and Munsif Vengattil in Bengaluru;
Editing by Bernard Orr)


Source link

Leave a Reply