Citing 'powder keg' with coming 'iPhone 8,' Cowen sees shares of Apple reaching $155

Posted:
in AAPL Investors edited March 20
Estimates for Apple on Wall Street remain "way too low," in the eyes of analyst Timothy Arcuri, who believes that the combination of a new iPhone form factor with an aging install base could create a "powder keg" for shares of the company.

'iPhone 8' concept image by Moe Slah.
'iPhone 8' concept image by Moe Slah.


Arcuri, of investment firm Cowen & Company, increased his AAPL price target on Monday to $155, citing the anticipated launch of a so-called "iPhone 8" later this year.

However, in the interim, he sees continued strong sales for the iPhone 7 series. Citing supply chain checks, he increased his forecast for iPhone sales in the March quarter to 50.5 million, with an average selling price of $685.

Still, the major catalyst is expected to be an iPhone update later this year, widely expected to usher in a new design -- the first major revision since the debut of the iPhone 6 in 2014. That premium model, known colloquially as an "iPhone 8," is expected to be flanked by an "iPhone 7s" series that will look largely the same as the current iPhone 7.




Arcuri's forecasts call for shipments between 55 million and 60 million for the new "iPhone 8" with OLED display. He believes Apple will ship another 20 million to 25 million for a so-called "iPhone 7s Plus," and an additional 35 million to 40 million for a 4.7-inch "iPhone 7s."

In all, he believes Apple could be in a position to ship some 110 million units of its trio of new iPhones later this year. Apple typically launches new handsets with a few days to go in its September quarter, with the bulk of new sales falling in the following holiday quarter.

Arcuri's expectations for the "iPhone 8" are largely in line with rumors: an edge-to-edge design with a 5.8-inch display featuring a new row of function buttons and virtual home button below the primary screen.

According to Arcuri, Apple is "trying to find a solution" to implement its AuthenTec Touch ID technology within the display of the new iPhone. Existing Touch ID implementations require a capacitive ring around a button, but Apple "has remained open to other options" for building a fingerprint sensor in the "iPhone 8," Arcuri claims.




He also weighed in on the expected facial recognition technology Apple is expected to introduce with the "iPhone 8," citing specific suppliers for the new forward facing camera. According to Arcuri, Apple has tapped Heptagon/AMS for a new infrared sensor, Lumentum and Finisar for a laser emitter, and STM for the camera's CMOS sensor.

According to Arcuri, the new 3D facial recognition technology will be exclusive to the "iPhone 8," and will not be available in the "iPhone 7s" series.

Other suppliers cited by the analyst include Broadcom for a wireless charging integrated circuit, glass casing materials from Corning, and dual-sourced baseband modems from Intel and Qualcomm. He also believes all three models will include 3 gigabytes of RAM, while the "7s" series will start at 32 gigabytes of storage, and the "iPhone 8" will come in two capacities: 64 and 256 gigabytes.

Cowen & Company's new price target of $155 is an increase from its previous 12-month forecast of $135. Shares of the company have been consistently above that outdated target since mid-February.

Comments

  • Reply 1 of 10
    lkrupplkrupp Posts: 4,608member
    Irrational exuberance is just as bad as unfounded depression. Pump and Dump. We are in a Pump cycle in case you didn’t notice. 
    watto_cobrabadmonk
  • Reply 2 of 10
    SpamSandwichSpamSandwich Posts: 25,974member
    Pump and dump! Pump and dump! Pump and dump! 

    These guys know the shtick and "shtick to it".
    lkrupp
  • Reply 3 of 10
    lkrupplkrupp Posts: 4,608member
    Pump and dump! Pump and dump! Pump and dump! 

    These guys know the shtick and "shtick to it".
    Get ready for the Dump. As we approach the iPhone 8 (or whatever) release date the news will start turning negative. Reports of disappointment, failure, delays, supplier anxiety will suddenly replace the exuberant praise. Post release the tech media will pounce. Of course we’ve seen this all before, many times. It would be funny if not so predictable. And the trolls living under the bridges of the various Apple blogs will do their part as usual. And AAPL will drop back to previous levels.
    edited March 20 chiawatto_cobrabadmonk
  • Reply 4 of 10
    sog35sog35 Posts: 12,199member
    lkrupp said:
    Irrational exuberance is just as bad as unfounded depression. Pump and Dump. We are in a Pump cycle in case you didn’t notice. 
    Pump and dump? what are you talking about.

    Apple is valued well below the average S&P500 company. Even at $155.

    Now take into consideration the $250 billion in cash. The most powerful brand in the world. The leader in smartphones, tablets, laptops, wearables, music, apps, ect. 

    This isn't a pump. This is the market finally giving Apple the credit it deserves.

    Personally I have Apple fair value at $170.  And if it was priced like the rest of the market it should be $200. Will it reach those levels? Who knows.
  • Reply 5 of 10
    lkrupplkrupp Posts: 4,608member
    sog35 said:
    lkrupp said:
    Irrational exuberance is just as bad as unfounded depression. Pump and Dump. We are in a Pump cycle in case you didn’t notice. 
    Pump and dump? what are you talking about.

    Apple is valued well below the average S&P500 company. Even at $155.

    Now take into consideration the $250 billion in cash. The most powerful brand in the world. The leader in smartphones, tablets, laptops, wearables, music, apps, ect. 

    This isn't a pump. This is the market finally giving Apple the credit it deserves.

    Personally I have Apple fair value at $170.  And if it was priced like the rest of the market it should be $200. Will it reach those levels? Who knows.
    sog35, old buddy, old pal, we appreciate your recent positive epiphany and the fact that you’re no longer calling for Cook’s head like you’ve doing for the last couple of years. However, just try giving it a rest for awhile will you. 
    watto_cobrafastasleep
  • Reply 6 of 10
    sog35sog35 Posts: 12,199member
    lkrupp said:
    Pump and dump! Pump and dump! Pump and dump! 

    These guys know the shtick and "shtick to it".
    Get ready for the Dump. As we approach the iPhone 8 (or whatever) release date the news will start turning negative. Reports of disappointment, failure, delays, supplier anxiety will suddenly replace the exuberant praise. Post release the tech media will pounce. Of course we’ve seen this all before, many times. It would be funny if not so predictable. And the trolls living under the bridges of the various Apple blogs will do their part as usual. And AAPL will drop back to previous levels.
    The stock will not DUMP unless sales or profits decrease YoY

    Some people like to say the 2016 decline in the stock was unwarranted or a 'dump'. But it wasn't. Sales were down 10% and profits were down 20%.  So stock price naturally went down.

    As long as Apple continues to grow sales for the next 4 quarters the stock will keep running up to probably $160-$170 level by next March/April.


  • Reply 7 of 10
    Rayz2016Rayz2016 Posts: 1,598member
    sog35 said:
    lkrupp said:
    Pump and dump! Pump and dump! Pump and dump! 

    These guys know the shtick and "shtick to it".
    Get ready for the Dump. As we approach the iPhone 8 (or whatever) release date the news will start turning negative. Reports of disappointment, failure, delays, supplier anxiety will suddenly replace the exuberant praise. Post release the tech media will pounce. Of course we’ve seen this all before, many times. It would be funny if not so predictable. And the trolls living under the bridges of the various Apple blogs will do their part as usual. And AAPL will drop back to previous levels.
    The stock will not DUMP unless sales or profits decrease YoY

    Some people like to say the 2016 decline in the stock was unwarranted or a 'dump'. But it wasn't. Sales were down 10% and profits were down 20%.  So stock price naturally went down.

    As long as Apple continues to grow sales for the next 4 quarters the stock will keep running up to probably $160-$170 level by next March/April.


    Never have I encountered someone with such a dogged determination to learn nothing from his past mistakes. 
    fastasleep
  • Reply 8 of 10
    sog35sog35 Posts: 12,199member
    Rayz2016 said:
    sog35 said:
    lkrupp said:
    Pump and dump! Pump and dump! Pump and dump! 

    These guys know the shtick and "shtick to it".
    Get ready for the Dump. As we approach the iPhone 8 (or whatever) release date the news will start turning negative. Reports of disappointment, failure, delays, supplier anxiety will suddenly replace the exuberant praise. Post release the tech media will pounce. Of course we’ve seen this all before, many times. It would be funny if not so predictable. And the trolls living under the bridges of the various Apple blogs will do their part as usual. And AAPL will drop back to previous levels.
    The stock will not DUMP unless sales or profits decrease YoY

    Some people like to say the 2016 decline in the stock was unwarranted or a 'dump'. But it wasn't. Sales were down 10% and profits were down 20%.  So stock price naturally went down.

    As long as Apple continues to grow sales for the next 4 quarters the stock will keep running up to probably $160-$170 level by next March/April.


    Never have I encountered someone with such a dogged determination to learn nothing from his past mistakes. 
    What past mistakes?

    I have no idea what you are talking about.
  • Reply 9 of 10
    SpamSandwichSpamSandwich Posts: 25,974member
    sog35 said:
    lkrupp said:
    Irrational exuberance is just as bad as unfounded depression. Pump and Dump. We are in a Pump cycle in case you didn’t notice. 
    Pump and dump? what are you talking about.

    Apple is valued well below the average S&P500 company. Even at $155.

    Now take into consideration the $250 billion in cash. The most powerful brand in the world. The leader in smartphones, tablets, laptops, wearables, music, apps, ect. 

    This isn't a pump. This is the market finally giving Apple the credit it deserves.

    Personally I have Apple fair value at $170.  And if it was priced like the rest of the market it should be $200. Will it reach those levels? Who knows.
    The entire market is up, it's not just AAPL.
  • Reply 10 of 10
    sog35sog35 Posts: 12,199member
    sog35 said:
    lkrupp said:
    Irrational exuberance is just as bad as unfounded depression. Pump and Dump. We are in a Pump cycle in case you didn’t notice. 
    Pump and dump? what are you talking about.

    Apple is valued well below the average S&P500 company. Even at $155.

    Now take into consideration the $250 billion in cash. The most powerful brand in the world. The leader in smartphones, tablets, laptops, wearables, music, apps, ect. 

    This isn't a pump. This is the market finally giving Apple the credit it deserves.

    Personally I have Apple fair value at $170.  And if it was priced like the rest of the market it should be $200. Will it reach those levels? Who knows.
    The entire market is up, it's not just AAPL.
    I mean what else are people going to invest in?

    CD? crappy 1% interest.
    Bonds? Crappy 2% interest.
    Real Estate? More over priced than Stocks
    Gold? Near all time highs

    Bottom line is stocks are still the most attractive investments even at these levels. Stocks like Apple provide nice dividends and solid future prospects with very little labor/work. 

    Aren't you the guy who said the stock market was going to crash THREE YEARS AGO?
    edited March 20
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