Wedbush: More good news from Apple next week

Our favorite large cap tech name to play the 5G transformational cycle is Apple” — Analyst Daniel Ives.

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

Next Tuesday, July 27th after the bell Apple reports its FY3Q results which we expect will be another beat across the board. The Street is looking for $73 billion and $1.00 of earnings, both of which look likely conservative given the underlying iPhone strength we saw during the quarter with a particular uptick in demand out of China. While the chip shortage was an overhang for Apple during the quarter, we believe the iPhone and Services strength in the quarter neutralized any short term weakness that the Street was anticipating three months ago. Taking a step back we believe based on our recent Asia supply chain checks that iPhone 13 demand will be similar/slightly stronger than iPhone 12 out of the gates which speaks to our thesis that this elongated “supercycle” will continue for Cupertino well into 2022.

From a timing perspective, we believe the current iPhone 13 launch is slated for the third week in September. Asia supply chain builds for iPhone 13 are currently in the ~90 million/100 million unit range compared to our initial iPhone 12 reads at 80 million units (pre-COVID) and represents a ~15% increase YoY out of the gates.

Maintains Outperform rating and Street-high $185 price target.

My take: A 15% increase in iPhone sales would be well received on the Street.

19 Comments

  1. David Emery said:
    “My take: A 15% increase in iPhone sales would be well received on the Street. ”

    Ya think? I don’t know what it would take for ANALysts to change their public view on AAPL.

    “Apple today announced it has parted the Red Sea to move a massive shipment of phones through the Suez Canal. Wall St was unimpressed. Lead analyst Toni Sacconaghi said ‘We see substantial problems for Apple due to to tidal currents as the Red Sea closes. Plus, we do not see a follow-on shipment.’ “

    17
    July 21, 2021
    • Alan Birnbaum said:
      Toni Sacconaghi also predicts that only 2 tablets will be available with no upgrade path seen. Due to local desert conditions, delivery will be postponed 40 years.

      /s

      11
      July 21, 2021
  2. Dan Scropos said:
    Rough eps estimate for Tuesday. $1.22 on ~$79 billion in revenue.

    0
    July 21, 2021
    • Bart Yee said:
      @Dan I note your model keeps adjusting. You had said initially EPS would be $1.11. A couple of weeks later you said “I’ve always loved his modeling but his eps for the next earnings date are at least a dime, and probably close to $.15, too low. Apple will not report below $1.15.”

      Now at $1.22 on ~$79B revenue is a nice adjustment. I hope you’ll add in your segment estimates.

      0
      July 21, 2021
  3. Fred Stein said:
    The massive increase in fiat and crypto currencies means more money for purchases of Apple products and of AAPL.

    Meanwhile Apple and its ecosystem partners give the world more and better products and services, which delight us in our physical and virtual life.

    0
    July 21, 2021
  4. Jerry Doyle said:
    “…. Maintains Outperform rating and Street-high $185 price target.”

    Lawdy, Lawdy Miss Clawdy! Mama’s making us all moon pies and Natchitoches meat pies. Just several months past folk thought a $200 Apple price target was a couple years out. At least now they are beginning to inch ever closer in laying it down on the table. Does that mean WS analyst are becoming as percipient as Apple Ives?

    2
    July 21, 2021
    • Gregg Thurman said:
      “…. Maintains Outperform rating and Street-high $185 price target.”

      That coincides nicely with my January target of $200.

      1
      July 21, 2021
  5. Kirk DeBernardi said:
    Methinks if AAPL history teaches us anything — and barring any Black Swans — I’ll go out on a limb here and declare that any latent market recognition of Apple’s “firing on all cylinders” will at least earn it a new bottom of 150-160 waffling into the close of 2021 with the entirety of 2022 being a battlefield of achieving the beachhead of 200 somewhere at its close.

    3
    July 21, 2021
    • Kirk DeBernardi said:
      Exuberantly restrained.

      😉

      3
      July 21, 2021
  6. Miguel Ancira said:
    My personal target of $300 in 2025 is not looking that far fetched.

    2
    July 21, 2021
  7. Michael Goldfeder said:
    Toni Sacconaghi issued a research note today indicating that Apple no longer innovates. The gist of the note stated: “Haley’s comet comes around more often than Apple comes out with a new and innovative product. We’ve seen Apple’s last innovation and were unimpressed.”

    6
    July 21, 2021
  8. Gregg Thurman said:
    This is starting to get boring.

    Each quarter we see:
    *Bullish statements from Wedbush.
    *Idiot statements from Sacconaghi
    *Questionable market share statements from IDC and others
    *A new crop of class action suits over the silliest of issues
    *Renewed regulator demands that Big Tech be A/ taxed more, or B/ broken up due to perceived anti-trust violations
    * A new round of Apple Car rumors
    * Unfounded/unvetted iPhone detail rumors
    And last but not least,
    * Nothing in the way of investment strategies beyond buy and hold.

    I’m starting to question my subscription, after all, I can reread archived articles and be 97% current with what’s happening at/with Apple/AAPL.

    7
    July 21, 2021
    • Kirk DeBernardi said:
      @ Gregg Thurman —

      Chin up Gregg.

      Reactions to threats/wins might collectively seem boring in retrospect, but a lack of certainty going forward is not.

      So many variables, each at such implausible moments in time.

      C’est la vie.

      1
      July 21, 2021
      • Gregg Thurman said:
        lack of certainty going forward is not.

        It isn’t the lack of certainty, it is the CERTAINTY that the topics of discussion will be the same quarter in and quarter out. It’s kind of like watching the evening news. Turn your television off for a year. When you turn it back on the names and places will change (maybe) but the news will be the same.

        2
        July 21, 2021
        • I took my last TV to the curb in 2008. I may stream a classic movie like Kurosawa, listen to baseball/hockey games or stream a Congressional hearing on my display but I left television behind long ago. I’ll go to a movie, with a date.. Outdoors, my gardens (3), apiaries, public venues, farmer’s markets, libraries, town hall meeting, anything involving contact with live humans or the actual stuff they create, grow or sit on, that’s where I thrive after work is done each day.

          0
          July 22, 2021
    • Bart Yee said:
      @Greg Heh, PED3.0 and AAPL getting too predictable?

      We could get our highs and lows and adrenaline rushes by following GME, AMC, TSLA, Bitcoin and any number of cryptocurrencies, GE, BA, etc.

      We could have a lot of fun defending FB, MSFT and GOOGL business models and decisions. I wonder what your options strategies would be for those two companies?

      0
      July 21, 2021

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