“We suspect this signals solid demand driven by more aggressive promotional activity around Black Friday compared to 2020.”
From a note to Goldman Sachs clients that landed on my desktop Wednesday:
In our weekly update of lead time data for Apple we note steady lead times for China and the US and a dip of ~7days across UK and Europe. We have also included lead times from US telco carrier websites for iPhones to capture impacts from US carrier Black Friday deals.
In the US we see some disparity between our normal panel and carrier specific lead times with carriers having longer lead times. We suspect this signals solid demand driven by more aggressive promotional activity around Black Friday compared to 2020. Globally we see iPhone lead times continuing to shorten which we believe signals supply and demand coming closer to equilibrium.
MacBook lead times are unchanged in China and the US vs. last week but increased by 5 days across Europe and in the UK. Given the uniformity of the UK/Europe increases for Mac we believe supply is more likely to be the driver.
Overall, we see a picture here of shorter lead times for iPhone Pro models than last year and supply rapidly catching up to demand. We also see some evidence that the US is tracking well to this point in the quarter with more attractive US carrier promotions the likely driver.
Maintains Neutral rating and $142 price target.
My take: Unpacking the methodology behind that soggy price target…
Our 12-month price target of $142 is based on 27x our Q5-Q8 EPS forecast. Upside risks include better than expected iPhone demand, services growth, and significantly outsized buybacks. Downside risks include weakening iPhone demand, pressure on gross margins, as well as large and dilutive acquisitions.
See also: How does Goldman Sachs’ Apple analyst still have a job?
This should cause anyone to throw out anything this lot says.
There’s no doubt in my mind that Forrest was referring to Hall.
Rod Hall is back! iPhone 13 lead times are down worldwide [ie, the demand is slowly being met by supply again, which must mean demand is bad!]
iPhone is doomed!
Oh, wait, that was the headline from epic Apple Blog The Macalope.
ON THIS DAY, December 2nd, 2015 – that’s 6 years ago for those having a senior moment – Macalope wrote:
“It’s that time again! Yes, it’s December so it’s time for receiving annual gifts that no one wants: Fruit cakes, holiday sweaters and “news” that Apple has cut iPhone orders.
Writing for the goblin-infested warren of ancient dwarf mines that hides an unspeakable darkness (not a balrog, but a guy who writes about things like how surprisingly tolerable it is to fly economy class, which is demonstrably worse than a balrog) known as Business Insider, Matt Weinberger details the collapse.
“CREDIT SUISSE: Apple’s newest iPhone is underperforming, but a mini iPhone could save the day.” (Tip o’ the antlers to @JonyIveParody.)
Apple is cutting orders for the components to build iPhones because of weak demand for the new iPhone 6s, according to a new report by Credit Suisse.
Right. OK. Sure.
Look, this is not exactly the first time this has happened. It happens around this time of year because Apple ramps up orders for launch in the fall and holiday season and then cuts back on orders for the post-holiday quarter. For some reason, this is shocking every year because analysts and Business Insider writers are like babies and do not remember things exist when they do not see them right in front of their eyes. Also, their heads might be soft. The Macalope has no direct knowledge of that but it seems likely.”
My take: Macalope rules.
I sent a copy to Philip & posted the link below though it may take a moment to show. Judge Chen was not impressed.
I’m impressed by Apple rising up through 163 this afternoon.
I doubt the UK is the exception to the rule. Apple keep vast amounts of stock to themselves and put carriers behind them, but as outside of the US, the iPhone subscription model is a small not a huge part of iPhone sales, more emphasis should be placed on carrier sell-through and not local Apple Store availability to get an indication of lead times.
I call bullshit on this.
After that sour morning market opening for Apple along comes brother Rod Hall to brighten my day with his comic antics 🙂 Rod is a good ole boy. He is ascending right up there with Toni.
I just luv it! Geaux Rod! Geaux Toni! Welcome Brian Kelly. I feel your pain Notre Dame fans.
The commentary about the AR headset and Apple Car is out there. The worry about Apple’s investments (or lack of acquisitions) are out there. There are a pile of TP raises, and the stock still didn’t take out $155 on the downtick.
I couldn’t resist and took a Christmas punt @ 159 with a stop just under $155.
I enjoy Bas’ insights immensely, but do we really need someone to tell us what we already know from years of following Apple bs rumors and Apple’s resultant performance?
“Unnamed sources somewhat familiar with the discussions but not authorized to comment because they were listening through doors and air vents stated that Apple and Disney will merge as a “combination of massive unequals” but with “huge upsides for both companies.”
In a stock swap deal backed by large Disney shareholders with ties to Apple, Disney shareholders will receive 1.2 AAPL shares for every DIS share which values the merger at $356B or $196/Disney share, a 33% premium to Disney’s current market cap and 18.7% premium to its enterprise value. With Disney down -4.1% over the past year and a shocking -18.7% YTD, DIS shareholders will now have much better prospects with AAPL shares instead. Indeed, if AAPL hits a newly minted Ives $200 price target, the merger would exceed $437B for Disney shareholders.
Said an unnamed CFO office gofer “look, the synergies are just too good to pass this up. We considered doing an all cash deal and get to cash neutral in one fell swoop, or maybe another two years tops if we borrow a couple hundred billion, but a stock swap deal makes a lot of sense, it only adds 12% to our float. DIS shareholders get a great premium for their shares. In exchange, and we’re still working out the details, AAPL shareholders of record by Feb. 8, 2022 would receive 4 variable length annual passes based on their oldest AAPL holdings – 1 year for <1 yr AAPL positions, 2 yr for 1-4 yr, 3 yr. for 5-8 yr, and 5 yr for 9-12 yr. 10 year passes are being discussed for anyone holding AAPL 13 yrs or older or prior to the iPhone introduction end of June 2007. Commensurate discounts for Disney Hotel, cruises, concessions and retail merchandise for all AAPL shareholders and Apple Pay users are being negotiated. As we see it, what better way to reinvigorate Disney theme park and travel business than to leverage Apple’s loyal and affluent user base?”
Disney and Pixar animation will transition to Apple M1 Pro Max iMic computing systems over the next 12 months and will help launch Mac and Mic Pro M2 Max models by 2023. “We anticipate hundreds of thousands of work hours saved with M2 Pro Max silicon for film and animation productions and special effects rendering.”
An anonymous secondhand spokesperson for Apple’s secretive Vehicle development project said off the record “this merger really provides us with rapid real world testing of our automotive systems. All the Disney Autopias worldwide will be expanded to closed loop multilane highways about 3 miles long filled with AppleCar Minis with partial and full assist driving. Random areas will present obstacles like cross traffic, animatronic pedestrians, character cyclists and occasional sigalerts. We anticipate 1-3 million passenger miles of testing annually with and without drivers or passengers. Our MagSafe RapidFlash charging allows for minimal downtime between 12-18 hour use cycles. All guest parking trams will be converted to closed loop and road “Autonomouse” operation using massive Electric tractor vehicles.
Apple will access Disney+ content in Apple TV+ bundles, but all new content like Marvel And Pixar Films will be dual premiered at similar costs. Said the unseen studio heads “we see tremendous opportunity to leverage both Disney and Apple brands as leading quality entertainment creators, each focused on family, children and contemporary adult themes.” The general structures of Disney will remain intact – “we see no reason to change a very successful operation. We aim to provide more opportunities for creativity and growth while offering premium content to our faithful Apple users and others around the world.”
Inside tea leaf readers channeled their respective CEO’s by stating “Here’s how we see it, this Apple-Disney combination is going to be a magical, amazing, and astonishing experience for both companies and all our valued guests and customers. We can’t wait to get to work .”
DIS was up $5 today and AAPL recovered to just $1 and change down while investors digested the news.
Huberty, Morgan Stanley – “positive for both companies, especially post Covid. But it will take 18-24 months to truly take off.”
Buy, Increase price target to $180 for 2022 and $210 for 2023. See chart 16 of 28 below.
Mohan, BofA Merrill – “a daring stroke but will it work?, cultures will be hard to mesh. Devil’s in the details”.
Neutral, price target $168.
Sacchonaghi Bernstein – “I don’t see how this is going to work at all”. Lowered to Neutral, price target raised $3 to $135
Hall, Goldman Sachs – “I don’t get it.”
Neutral, maintain $142
Ives, Wedbush – “Cook does it again!”
Buy, price target to $225.