Goldman Sachs: Bullish on Apple’s new iPhone sales, but…

Goldman analyst Rod Hall is sticking with his street-low $164 price target.

From a note to clients that landed in my inbox Friday:

Heading into FQ4, our main focus is on September guidance and what that implies about new iPhone launch timing and ASP expectations. For our part we continue to be materially ahead of consensus for the September guide on ASPs driven by our detailed SKU level model. We also look for more color around Apple’s thinking on price elasticity at the high end though it is unlikely the company changes its generally positive tune there. Services growth and commentary on qualitative developments in that area are also of interest to us including any additional color on continued video content newsflow. Finally, the June quarter share repurchase rate will be an important metric to help us gauge how quickly Apple is utilizing their current authorization.

iPhone revenue guide and implied ASPs in focus. We forecast iPhone shipments of 47mn units in FQ4’18 (September quarter), in-line with the Street (based on FactSet consensus). However, our September quarter iPhone ASP of $732 is 4% ahead of consensus and is driving our FQ4’18 iPhone revenue forecast 2.6% ahead of consensus. If anything, we believe our ASP forecast is cautious given a likely earlier iPhone launch this year.

Upcoming iPhones availability and FQ4 shipments… We model one week of availability of the upcoming new iPhones – we expect two OLED versions and one LCD version – in the September quarter, similar to the historical trend of 1-2 weeks of new iPhones availability in September. Again, if anything we believe this could be cautious by one week. We forecast ~17mn units of new iPhone shipments in FQ4’18 to September.

Maintains Neutral rating and $164 price target.

My take: I may put too much weight on these 12-month price targets, but it’s striking how differently Hall (who joined Goldman Sachs in January) treats them compared with his predecessors: Bill Shope (retired in Sept. 2015), and Simona Jankowski (left in August 2017 to run investor relations at Nvidia). See chart below. 

See also:

10 Comments

  1. Michael Thompson said:

    Uber-bear Rod Hall, who has been purposefully wrong for years, chimes in with more lies on options expiration Friday and during Apple’s quiet period. I’m sure that he’s not attempting to manipulate the market. Ok.

    Following Roderick’s advice on Apple is ruinous to your financial health. Roderick was a purveyor of misinformation and horrible advice on Apple when he worked at JP Morgan previously.

    And now a short list of Rod’s “accurate” market calls:

    1. https://www.cnbc.com/2018/03/28/goldman-sachs-slashes-apple-iphone-sales-estimates.html

    2. https://m.benzinga.com/article/11148837

    3. While at JP Morgan downgrading Apple at a multi-year low, 2+ years ago and 100%+ return missed since then: https://appleinsider-com.cdn.ampproject.org/v/s/appleinsider.com/articles/16/06/16/jp-morgan-downgrades-apple-stock-expectations-on-negative-macro-trends-apple-watch-forecast/amp/?amp_js_v=0.1&usqp=mq331AQGCAEoATgA#origin=https%3A%2F%2Fwww.google.com&prerenderSize=1&visibilityState=prerender&paddingTop=54&p2r=0&horizontalScrolling=0&csi=1&aoh=15320893855847&viewerUrl=https%3A%2F%2Fwww.google.com%2Famp%2Fs%2Fappleinsider.com%2Farticles%2F16%2F06%2F16%2Fjp-morgan-downgrades-apple-stock-expectations-on-negative-macro-trends-apple-watch-forecast%2Famp%2F&history=1&storage=1&cid=1&cap=swipe%2CnavigateTo%2Ccid%2Cfragment%2CreplaceUrl

    How many things in business that are worthwhile, have you been given for free in your lifetime? Goldman Sachs is giving FREE investment advice on Apple this morning. I’m sure that there’s tremendous value in it.

    2
    July 20, 2018
    • Gregg Thurman said:

      I think there is a lot of value in Ron’s analysis. Just ignore his price targets. : )

      0
      July 20, 2018
  2. Gregg Thurman said:

    AAPL gave me somewhat of a fright late in the day dropping about $1.50 in the hour before expiry, hitting an intraday low of $190.19. I sold all of my contracts (AAPL at $190.31) leaving $869 of $37,173 profit on the table. Then, just to piss me off, AAPL shot up to Close at $191.30.

    The Standard Deviation intraday low of the Historical Trend indicated a print of $190.15. I just didn’t want that to happen right before the Close.

    1
    July 20, 2018
    • Gregg Thurman said:

      During AAPL’s sudden late afternoon decline somebody bought ~1.1 million shares of AAPL in block trade transactions.

      Was AAPL manipulated? I don’t know, but I don’t like the coincidence at all.

      0
      July 20, 2018
      • Michael Thompson said:

        Of course Apple was and is manipulated over the short-term. I’m long 70,000+ Apple shares and there’s simply NO lie, no disinformation and no manipulation that will get me to sell a single share. I reinvest all dividends back into Apple stock.

        If you’re dumb enough to sell me Apple at 14x 2019 earnings, I’ll buy every share that I can.

        1
        July 21, 2018
        • Gregg Thurman said:

          Excellent.

          After upcoming earnings report I’m going to institute an options strategy (in my Roth IRA) that will reward me with “free” shares, meaning that I will get all of my investment monies back (and thensome) plus AAPL shares. The point is to acquire shares WITHOUT DIMINISHING available cash, and with AAPL’s historic ~25% appreciation rate (plus dividends) I’ll make more than mutual fund rates on my shares.

          0
          July 21, 2018

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