From a note to clients by analyst Tim Long that landed on my desktop Thursday morning:
We are adjusting our iPhone estimates post our virtual Asia trip and raise our price target from $288 to $326 while maintaining EW rating. Supply chain indicates order trend is tracking ok with SE2 being stronger and iPhone 11 recovering gradually. As expected, four models will be launched with 5G in 2H with 4-6 weeks of delay. There is increasing evidence of Apple taking aggressive effort to control BOM cost to maintain margins given added features. Our iPhone units are 3% and 5% lower for Jun-Q and Sep-Q, while Dec-Q is 3% higher…
iPhone trend. Near-term trend seems in-line for units. We are seeing recovery in May/June from very weak March/April as economy reopens. Order trend suggests SE2 is doing quite well, and iPhone 11 demand has been recovering from Covid-19, but not as strong, indicating mix maybe a less favorable than expected. New iPhone builds looked flattish Y/Y for 2H at 60-70M. Mix is much more uncertain this year given the increased number of new devices and impact from recently introduced SE2.
Other products. AirPods Pro is seeing stronger trend than AirPods 2 thanks to better performance with moderate price difference, and supply chain suggest a total of 80M units for the year, down from 90M previously and in-line with our model. We believe supply chain moves from China to Vietnam had an impact. Watch is expected to be 30- 35M units this year, in line with our current estimates. Both iPad and Mac are beneficiaries of WFH trend and seeing stable demand.
Maintains Equal Weight rating, raises price target to $326 from (deep underwater) $288.
My take: Virtual Asia trips have got to be less taxing and way more cost-effective than, you know, getting in airplane and flying there. Wave of the future?