The Street's fiercest Apple bear digs in his heels.
From "Weak Pre-Orders for the new iPhones," a note to Rosenblatt Securities' clients that landed on my desktop Friday:
Every year, we speak with several retailers and telecos surrounding pre-orders and sell- through data following the launch of the new iPhone. Below, we highlight our recent findings for the iPhone 11, Pro, and Max.
China’s telecos did not highlight the new iPhone 11 this year as they focused on promoting 5G smartphones instead. We found it very difficult to find China Mobile (CHL: NR), China Unicom (CHU: NR), and China Telecom’s (CHA: NR) pre-order webpage. In addition, the China telecos did not highlight pre-orders on their main webpage.
US and Other Regions
Although we believe this year Apple ramped production faster during the September quarter, we think iPhone 11 Pro and 11 Pro Max production may be 20-30% lower than initial production of the iPhone XS and Max. We think OEMs allocated more capacity for iPhone 11 production.
Therefore, there is no wait time today for the iPhone 11 Pro and Max, suggesting that initial sales of the two models could be 20-30% lower than iPhone XS and Max sales last year.
For the iPhone 11, we believe the best compare is to the iPhone XR. For the initial production ramp, we believe both models are at similar levels. The 1-2 week wait time last year for the iPhone XR suggests iPhone XR initial orders are higher than the iPhone 11 initial orders.
Maintains Sell rating and $150 price target.
My take: Zhang's "Risks" section makes it perfectly clear where Rosenblatt Securities has placed its bets.
Risks to our target price and target rating include stronger than expected iPhone sales, a more aggressive stock repurchase plan, better than expected gross margins, and stronger than expected services revenue leading to an acceleration in overall revenue growth.
I've never seen an analysts put his cards on the table like this.