Another price target hike, this one to $155 from $135.
From a note to clients by Cowan analyst Timothy Arcuri that landed in my inbox Monday:
Mo’ Money, No Problems; iPhone Update Ahead of the Powder Keg
Field work for both near-term iPhone 7/7+ supply and early read on iPhone new model builds support our long-held view that Street ests remain WAY TOO LOW for C2H:17 and C2018 as an aging base (esp in China) forms a powder keg for this launch… We are raising our iPhone unit estimates for both Qs and continue to see ASP tailwinds w/mix shifting to the premium model…
Lastly, the sell side is now largely bullish but some investors are starting to question whether valuation is full. On a RELATIVE basis, AAPL is still at a much larger discount to the market even at the same absolute P/E today vs mid 2014. While we are not arguing for a ton of multiple expansion from here, we believe estimates are still way too low AND there is still probably a little juice left in the multiple.
Maintain Outperform, raise price target to $155 from $135.
Here’s Arcuri’s fever chart of Apple’s discount over time:
Click to enlarge. Not seeing? Try the website.