Wednesday, July 23, 2014 4:45:53 PM
11:31 AM ET · AAPL
"With [gross margins] stabilizing and core demand trends solid, we think investors will want to own Apple (AAPL +3%) stock into bigger-screen iPhone 6 and ecosystem-expanding iWatch/iBand launches," writes Evercore, staying bullish on Apple following its mixed FQ3 results and light FQ4 guidance.
Macquarie: "The bottom line is that the iPhone 6 reception is what matters right now." Its target has been raised by $7 to $102. At least 6 other firms have also hiked their PTs today.
Citi, which recently launched coverage at Buy, expects 140M iPhone 6 sales over the first 12 months (compares with an iPhone installed base of 300M), and thinks the adoption of installment/early upgrade plans could provide further upside.
It's also pleased with Apple's 28% Greater China growth, given fears of tougher competition from local vendors - fast-growing Xiaomi just rolled out a metal-framed flagship phone that goes for $320 unsubsidized.
9to5 Mac reports today Apple is "tentatively" planning to unveil the iPhone 6 in mid-September. Sources state the 4.7" model is set to be shown off, but add a final decision hasn't been made on revealing the 5.5" model at the event. KGI reported last week the 5.5" model could be delayed due to production issues.
The site also reports Apple is planning an October event that will likely involve an iWatch/fitness band. Apple is fresh off receiving a patent for a modular smartwatch design that includes a strap with built-in sensors and other circuitry.
Prior Apple earnings coverage
Comments(25)
name999
Jul 23 11:38 AM
Sit tight, buckle up. The next stop is $100.
aardvark3
Jul 23 11:42 AM
This is going to be fun. Patience really does pay off.
Humble Eagles
Jul 23 02:12 PM
Senior VP E. Cue on new products, "Later this year, we've got the best product pipeline that I've seen in my 25 years at Apple," and when later challenged on Cue's statement, Cook didn't equivocate, but said he agreed with Cue! I suspect we are looking at some interesting stuff come Sep/Oct. Maybe Apple has changed its ways, and execs now blow smoke, but I doubt it. I think they have some game changers coming soon. The best news is that 9 month earnings are growing over 15% YOY when you use the actual share count at the end of the qtr! The buyback, even with moderate growth, is producing excellent EPS growth. Should they unlock new categories and services, it gets much better.
thotdoc
Jul 23 11:43 AM
today is a good day to remember...if you are an average retail investor...do not try to time stocks
Ashraf Eassa
Jul 23 11:45 AM
The Xiaomi Mi4 is not "all metal".
Paulo Santos
Jul 23 11:57 AM
But it's a pretty good phone for the price, that's for sure.
Ashraf Eassa
Jul 23 11:59 AM
I don't doubt it!
Davidoff
Jul 23 12:13 PM
It's still a Chinese phone. China is far from having the same image as Japan in the nineties, but it should come pretty soon. No matter what Xiaomi executives say, a high end phone can't worth that cheap to be adopted by snobbish consumers, so it's years away of Apple. Xiaomi is rather a potential thread for Android makers. I know that many people are already ready to purchase a Chinese tech product, but I also know that it's completely unthinkable for most of consumers. In any case, there are a lot of "established" phones that could be purchased for $320 any asp decrease even faster on this highly competitive market.
Paulo Santos
Jul 23 12:28 PM
The iPhone is also a Chinese phone. It's built there, and some of the technical design is probably occurring there as well.
The Nexus 5 is not much different from the newer Xiaomi, but it's got slightly worse specs for a bit more $.
Davidoff
Jul 23 12:34 PM
I'm not saying that you're wrong, but what does matter is the brand recognition. What is inside the phone, who produces it or whose technology is being used doesn't matter to an average Joe. You can make the exact same phone as the iPhone, if it doesn't have the little apple on the back, it won't sell as well.
Paulo Santos
Jul 23 12:43 PM
Ah, I agree with that.
But one wonders up until what price difference will AAPL manage to maintain its sales ... right now you're beginning to get phones that are equivalent to the iPhone at 1/2 the price. This is what did the Mac in during the PC wars (first price and volume, then the ecosystem) ...
gensearch2
Jul 23 01:16 PM
The android OS is fragmented and their ecosystem is fragmented. You have your Samsung App Store, your Google Play store and now your Amazon App Store.
I think Google made a major strategic error in allowing manufacturers to customize their Android and permit competing app stores.
Paulo Santos
Jul 23 01:28 PM
Only Google Play matters, the others are tiny (like 1/100th, 1/1000th the size of Google Play in terms of downloads)...
Jack Baker
Jul 23 02:21 PM
"equivalent"....hardly. You're talking simply about hardware. Hardware is one piece of the ecosystem and as hardware has become commoditized it more about the software, customer service, retail infrastructure and the entire ecosystem. Android still only has 5,000 native tablet apps that aren't stretched out phone apps compared to iOS's 500,000. And, you can't compare the interoperability of Android devices with iOS devices. Nor can you compare the customer service or retail store base. And, even as hardware goes, iPhone is still the only smartphone with a 64 bit chip in it. So, equivalent....no.
Paulo Santos
Jul 23 02:26 PM
We're talking smartphones - regarding apps they're mostly already equivalent as well.
Humble Eagles
Jul 23 02:26 PM
Another point a lot of people miss: phones are actually more important to most people than their laptops! They are more likely to go cheap somewhere else. Also, in the US or any place where plans are subsidized, it is only a fraction of the price. If I have to pay $200 for a nice iPhone or $100 for a buggy and unsecure Android phone, I will gladly pay 100 to 200% more for the iPhone!
Paulo Santos
Jul 23 02:31 PM
The subsidization is a massive factor, yes.
benfromchicago2689
Jul 23 12:40 PM
Does Citi have a Apple Bulls department under Jim Suva and Apple Bear department under Glen Yeung? So now it is the bull's department to talk.
Or they just get all the info from SAC?
Mark Krieger
Jul 23 01:04 PM
Sell into the euphoria. That's how you get the best price! The company's revenue growth rate is slowing.
gensearch2
Jul 23 01:23 PM
Holding AAPL until the 6 is released is a bet with good odds.
iOS7 needs to revolutinize
Jul 23 01:46 PM
Apple still has solid fundamentals with stable margins and ridiculous profits. This is a hold up to $150.
Humble Eagles
Jul 23 02:48 PM
The problem is identifying the correct euphoria zenith! Suppose Apple releases fantastic wearables, new TV devices, two large and new iPhones, competitive new Macs, new iPads and new services over the next three months. Does the euphoria happen now or after the January CC sometime at $150? I certainly agree it is always best to sell into euphoria, but we have probably all sold into euphoria before and then wished we hadn't. Time will tell.
ramachan
Jul 23 01:56 PM
It is exciting to watch my portfolio grow, apple being the major driving force. Touch wood, the next six months is going to be fun time
toshellyw@yahoo.com
Jul 23 02:16 PM
$150 and higher!
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