From a note to clients by analyst Amit Daryanani that landed on my desktop Wednesday:
All You Need to Know: We are raising our Dec-qtr and beyond estimates to reflect a combination of – a) better iPhone unit trajectory, b) higher ASP as we see mix shifting towards Pro/max and c) better services growth given >30% growth for AppStore.
Importantly not only do we see demand remaining robust in Dec-qtr but also expect upside to sustain in March-qtr as the channel fill sustains especially given extended lead-times for iPhone 12 Pro and to lesser extent Pro Max.
The iPhone Pro has now been shipping for two and a half months and our analysis suggests lead time remains elevated across each country we track, with the exception of the US. The US currently offers the opportunity for same day delivery on the iPhone Pro; however, this is a special courier delivery that costs an additional $10 (first time we have seen this option).
Standard delivery still requires a 21 day wait, a modest improvement from the 33 day wait we recorded at the beginning of December. Outside of the US, China delivery times for the 12 Pro have come down from 23 to 16 days (still the longest lead-times 10-weeks out for any iPhone in history). The iPhone 12/12 Mini has shorter delivery times across all regions, which could point to a strong mix of higher priced iPhone 12 Pros.
Net/net: Delivery time data continues to point to strong demand for the Pro/Pro Max models, which could have a materially positive impact for both mix and margins… Higher target is driven by an higher EPS (increased our iPhone ASP assumption) and a 1.0x increase P/E multiple.
Maintains Outperform rating, raising price target to $145 from $135.
My take: Apple sentiment is shifting.