Apple: J.P. Morgan trims its 236 million iPhone build estimate by 6 million units

But analyst Samik Chatterjee is sticking with his $150 price target.

From a note to clients that landed on my desktop Thursday:

In conjunction with a modest downward revision in the iPhone EMS build estimate by JPM Apple Supply Chain analyst, William Yang, and following JPM’s channel checks post Chinese New Year indicating weaker-than-expected smartphone demand, we are moderating our iPhone shipment volume estimate for both C1Q and C2Q.

While modest downward revisions in iPhone build estimates following the peak holiday quarter is not atypical, the combination of quite lackluster demand for the iPhone 12 mini (likely to be discontinued by the supply chain starting 2Q) and the first major cut to iPhone 12 Pro build shipments (which had the strongest lead times in the holiday quarter) makes us take note of a weaker demand environment, led by the combination of weaker consumer spending in China as well as a normalization of demand trends following the uptick from early 5G adopters.

Nonetheless, even as our iPhone shipment estimates for CY21 moderate from ~236 mn units to 230 mn units, it still implies 13% y/y increase in volumes in CY21, led by the 5G upgrade cycle. Additionally, despite the reduction in our iPhone volume shipment forecasts, we see only minor tweaks to our earnings estimates given the benefit from weaker USD.

Finally, relative to valuation, AAPL shares are trading at ~27x NTM P/E and investors have already acknowledged that shares might underperform near term on the combination of the valuation multiple and downward volume revisions; however, we believe given recent resilience in iPhone sales even during a pandemic, AAPL shares will continue to trade at a higher multiple through the cycle than in previous years.

Maintains Overweight rating and $150 price target.

My take: Modest downward revisions in iPhone build estimates following the peak holiday quarter are not atypical. And yet they still make news.


  1. bas flik said:
    is iphone counting still relevant?
    if yes then i go for 250mio based on my own sales data.
    q4 2020 we sold 40% more iphones than q4 2019

    February 25, 2021
  2. Gregg Thurman said:
    JP’s analysis is incomplete. There is no mention of Mac, iPad, Apple Watch, Home Pod, Air Pod Pro, Air Pod Max or Services.

    I believe demand remains high for Macs, iPads, Apple Watch Air Pod Max and Services, so the impact from a reduction in iPhone sales will be partially offset by demand for Apple’s other products. Probably why Chatterjee didn’t lower his price target.

    February 25, 2021
  3. Fred Stein said:
    Unit shipments estimate at 13% YoY vs. 16% prior estimate. Likely at higher ASP.

    Plus all the good stuff Gregg mentions above.

    Maintains target at 20% above current price.

    February 25, 2021
  4. Tommo_UK said:
    Pointless note containing no actionable data just “whoreing for hits.”

    Watching 10yr spike and presenters wetting themselves with excitement when GME managed to leapfrog the Matterhorn was much more fun.

    Glad I’m still out of this for now. Insanity is building. I am feeling like it’s almost time to go shopping now though but can’t go all in, in this absurd environment. When I say toxic cess pit, you know I really really mean I think it’s that kind of toxicity which just rips your face of for just having a look.

    February 25, 2021
  5. Kirk DeBernardi said:
    “ My take: Modest downward revisions in iPhone build estimates following the peak holiday quarter are not atypical. And yet they still make news.”

    …and they still get put on this blog.

    (You left that one wide open, PED.)


    February 26, 2021
  6. James Dean said:
    Yet JP Morgan and Goldman Sachs just drew millions of dollars out of AAPL’s coffers for a recent bond offering.

    Wish the dog could bite the hand…


    February 26, 2021

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