To $120 from $102. Apple closed Wednesday at $140.68.
From a note to clients by Rosenblatt Securities analyst Jun Zhang that crossed my desk Wednesday:
- We believe that Apple has recently reduced their June quarter production forecast by around 8-10%, mainly for the iPhone 7. Accordingly, we reduce our June quarter revenue estimates.
- We also believe that Apple has an aggressive iPhone 8 production forecast targeting 100-110M units in 2H17. We raise our September quarter revenue estimates, but maintain our FY 2017 revenue estimates.
- In our view, the iPhone 8 OLED model will have a better cycle than the iPh-one 7, and recent positive sentiment already reflects iPhone 8 optimism.
- Slowing demand in China and increasing competition from Samsung this year might limit iPhone 8 sales growth. Further hardware upgrades might not be able speed up the overall smartphone upgrade cycle.
Maintain Neutral rating, raise price target to $120 from $102.
Note: Apple usually reduces iPhone production in the June quarter.