Credit Suisse: Currency headwinds could buffet Apple

Kulbinder Garcha’s note to clients blew into my inbox Wednesday morning. Two excerpts:

Recent moves in FX could present a top line and GM headwind of as much as ~300bps to FY17 estimates. Additionally, the recent currency moves may trigger price increases in local currencies on the next product cycle. Both of these factors lead us to lower our iPhone unit, ASP, and GM expectations.

We have seen a number of data points recently suggesting units should come in line with expectations (e.g. Dialog) with a positive mix shift towards the iPhone 7 Plus, supported by our checks with the supply chain. We note that it was around this time last year that the supply chain began warning of softening demand. As a result, we estimate 77mn/52mn units in F1Q17/F2Q17. For CY17/CY18, we now estimate ASPs of $641/$659 and iPhone GMs of 38.5%/39.3% for CY17/18, reflecting the impact of recent FX moves.

Rating: Outperform. Target price: $150.


  1. John Kirk said:

    I know traders think quarter-to-quarter and day-to-day, but for investors, this sort of short-term thinking is counter-productive.

    January 25, 2017
  2. Turley Muller said:

    Is that a Westie in the wind ?

    January 25, 2017

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