Mizuho raises Apple price target to $150 from $135

Analyst Abhey Lamba joins the club.

From a note to clients that landed in my inbox Monday morning:

Due diligence by our Japan analysts has led them to raise their CY17 procurement estimates by over 10mm units. We further see potential for a significant product cycle later this year as the new device is likely to induce significant upgrades within the iPhone installed base of ~500-600mm devices. In all, we remain positive on the name on potential upside to estimates, improving sentiment and supportive valuation. Further, we see meaningful upside to current levels based on our LTVC [long term value creation] analysis…

The iPhone 8 is expected later this year and marks the 10th anniversary of the device. Based on prior survey work findings around elongating upgrade cycles, we believe that aging devices within the installed could trigger a significant upgrade cycle in the near-term if product features represent material changes from the current line-up…

Potential features on the new device include a bezel-less OLED display, a full-screen display without a home button, 3D sensing for facial recognition, wireless charging and better dual cameras. We note that the OLED display alone could add $25-30 to the device’s BOM and, with Apple inclined to protect its margins, there could be an incremental step-up on pricing (similar to when the 7+ launched). In the event of strong upgrade cycle, there is potential for ASPs to move higher.

Reiterate Buy. Raise price target to $150 from $135.

One Comment

    Leave a Reply