Canaccord raises Apple target to $660, finds iPhone 5s top seller at all major US carriers
With its price target at risk of falling below the company's actual trading share price, Canaccord Genuity on Thursday updated its forecast for Apple stock to $660, and revealed the results of a new survey that found the iPhone 5s is the most popular handset at all four major U.S. carriers.
Analyst Michael Walkley's latest update came in a note to investors, a copy of which was provided to AppleInsider. It comes on the heels of a recent surge in Apple's stock price, which temporarily pushed it above $600 earlier this week.
Apple's high of $604.41 put it very close to Walkley's previous price target of $610. Still, other analysts remain "underwater" with their projections, and have not provided further revisions to their targets following Apple's recent gains.
Walkley, however, justified his new price target of $660 as his firm's surveys conducted in April found that the iPhone 5s was the top selling smartphone not only at all "tier-one" U.S. carriers, but also at a number of global channels.
The April surveys also found that customers are increasingly opting for early upgrade programs, and are showing a greater propensity toward more expensive smartphones when enrolling in such programs. All four major U.S. carriers now offer such programs: AT&T Next, Verizon Edge, T-Mobile Jump, and Sprint One Up.
Walkley sees strong adoption of these programs as a good sign for Apple, and in particular the company's anticipated "iPhone 6" launch later this year. He believes that those upgrade programs -- along with anticipated new, larger screen sizes for Apple's next-generation iPhone -- could result in an especially strong upgrade cycle for the Cupertino, Calif., company.
In addition, Walkley believes that the carrier upgrade programs could allow Apple to charge a premium for larger-screen iPhones. Rumors have suggested Apple will launch a so-called "iPhone 6" in two screen sizes later this year: 4.7 inches and 5.5 inches.
"We believe Apple could charge a premium for a potential phablet-type iPhone 6 SKU, and with carrier subsidies or smartphone leasing-type payments to generate solid incremental gross margin dollars from this device, even if it partially cannibalizes some iPad tablet sales," Walkley wrote.
Canaccord Genuity's new $660 price target comes with a maintained "buy" rating. Walkley did not make any changes to his annual earnings per share or revenue estimates.
Analyst Michael Walkley's latest update came in a note to investors, a copy of which was provided to AppleInsider. It comes on the heels of a recent surge in Apple's stock price, which temporarily pushed it above $600 earlier this week.
Apple's high of $604.41 put it very close to Walkley's previous price target of $610. Still, other analysts remain "underwater" with their projections, and have not provided further revisions to their targets following Apple's recent gains.
Walkley, however, justified his new price target of $660 as his firm's surveys conducted in April found that the iPhone 5s was the top selling smartphone not only at all "tier-one" U.S. carriers, but also at a number of global channels.
The April surveys also found that customers are increasingly opting for early upgrade programs, and are showing a greater propensity toward more expensive smartphones when enrolling in such programs. All four major U.S. carriers now offer such programs: AT&T Next, Verizon Edge, T-Mobile Jump, and Sprint One Up.
Walkley sees strong adoption of these programs as a good sign for Apple, and in particular the company's anticipated "iPhone 6" launch later this year. He believes that those upgrade programs -- along with anticipated new, larger screen sizes for Apple's next-generation iPhone -- could result in an especially strong upgrade cycle for the Cupertino, Calif., company.
In addition, Walkley believes that the carrier upgrade programs could allow Apple to charge a premium for larger-screen iPhones. Rumors have suggested Apple will launch a so-called "iPhone 6" in two screen sizes later this year: 4.7 inches and 5.5 inches.
"We believe Apple could charge a premium for a potential phablet-type iPhone 6 SKU, and with carrier subsidies or smartphone leasing-type payments to generate solid incremental gross margin dollars from this device, even if it partially cannibalizes some iPad tablet sales," Walkley wrote.
Canaccord Genuity's new $660 price target comes with a maintained "buy" rating. Walkley did not make any changes to his annual earnings per share or revenue estimates.
Comments
Noooo it's going to drop precipitously to around $100+ a share ...
http://support.sprint.com/support/article/Learn_more_about_Sprint_One_Up/35e890a8-cbab-4cc4-99a7-91b0bc533e35? INTNAV=LP:Support:01102014:oneup
As an added option to the Framily Plan, you can select the $20 Unlimited Data with Annual Upgrades. That's what I have on my account.
Sprint is offering $0 down for any base iPhone with approved credit. If your credit isn't very good, they ask for $100 tax on the full retail price for an iPhone 5S 16GB. As part of that, they charge $7.99 per month for the credit issues instead of requiring a large deposit. If you option for paperless billing and auto pay, they waive the $7.99 charge.
As for the annual upgrades, Sprint doesn't note of any activation charges when upgrading.
"Unlimited Data and Annual Upgrade Buy Up: Req. min.12 consecutive payments, new Installment Agreement, acct. in good standing, & give back of current eligible device in good & functional condition. After upgrade, remaining unbilled installment payments are waived"
I'm no financial anal-ist, but it's clear to me that AAPL will run north of $700 in the next few months.
A year from now... I definitely agree with you.
So with the advent of NeXT (oops, er Next, I date myself), the family plan "clustering" is less lumpy, and we can all upgrade at times that make more individual sense. This evening-out bodes well for both Apple, to predict manufacturing requirements better and smooth earnings, and the carrier AT&T at least, whom I hear gets a more immediate EPS boost which they could use for nefarious reasons. Sort of like when Apple switched accounting methods to make AAPL EPS more visible.
T. Cook partly addressed this phenomemon in his quarterly earnings call. The pent-up demand for the iPhone 6 created by the carrier-created hiccup should be sweet to shareholders.
But the screen is only 4". And that candy colored my little pony iOS 7 sucks balls. /s
My iPhone4 has a 3.5" screen and iOS7 is lovely on it.
How nice of Apple to support the upgrading of my 3+ yr old, still in perfect condition with no maintenance needed, iPhone4.
Android users who are stuck with an old Android version, please take note!
I can see the 5.5 at $299. That was the first iPod touch’s base price, after all.
“Are you still…”
Implying that it’s not an iPhone? Of course.
But the screen is only 4". And that candy colored my little pony iOS 7 sucks balls. /s
I understand the desire to push back at the constant nonsense the iHater crowd and analysts puke out about Apple. They have become comic caricatures of themselves and are laughable. But they have no sense of shame, no embarrassment, no pride and will not stop because we prove them wrong day after after day. So why even bother anymore?
Agree about the strong upgrade cycle. As a datapoint, in my AT&T family plan, months ago, I had carefully planned to upgrade everyone to a 5S because the 2-year contract dates were clustered too closely, but because the carrier pushed out all these upgrade dates (18-months at the time), no sale! As many know, unless you are planning to switch carriers, on full two-year subsidy plans you "lose money" if you don't take advantage of an upgrade as soon as that date rolls around.
So with the advent of NeXT (oops, er Next, I date myself), the family plan "clustering" is less lumpy, and we can all upgrade at times that make more individual sense. This evening-out bodes well for both Apple, to predict manufacturing requirements better and smooth earnings, and the carrier AT&T at least, whom I hear gets a more immediate EPS boost which they could use for nefarious reasons. Sort of like when Apple switched accounting methods to make AAPL EPS more visible.
T. Cook partly addressed this phenomemon in his quarterly earnings call. The pent-up demand for the iPhone 6 created by the carrier-created hiccup should be sweet to shareholders.
Agree...in fact, I found it easier to upgrade now...I tried the S5 for 2 weeks and return it...no money down or activation fees using Next.
I think this upgrade programs will be a boom for Apple.
http://www.channelpartnersonline.com/galleries/2014/05/april-s-hottest-selling-smartphones.aspx?cmpid=APRPHOTW
That's probably the copy they are sent from Scamsung as part of their marketing package along with a check.
We'll know soon enough when Canaccord makes their actual findings public. My guess is that it was AppleInsider that was scammed.
It's so weird. I'm always reading articles saying how the iPhone display is too small to be useful. I still see people using iPhones but maybe they're hoping for large displays in the future. I'm really curious to find out how many consumers actually want larger smartphones. I'm sure it depends on the global region. Koreans seem to prefer larger smartphones but obviously the Japanese can make do without them. In China I figure it may all be about pricing or bang for the buck. Maybe Chinese consumers think they're getting more for their money if they pay less for a larger display smartphone. Apple sold 43 MILLION iPhones with 3.5" displays last quarter and that's no small number by any standard. From that sales number it seems to be a stretch to say that Apple has made a huge blunder and no one wants smartphones with smaller displays.
Most of the posters display a lot ignorance about how the appl stock moves and they do not understand the forces at works which move a stock price. There are many factors at work too numerous to mention.
I will give you a basic primer on stock charts
Stock price growth is essentially based on earnings (which is a fancy word for profits) the more profit a company makes the higher its stock price generally rises. Profits are the gasoline which drives the share price over the long term.
Some other factors which governs share price are the famous greed/fear emotions. Take the recent gap up to $600 after earnings. As this happened, more buyers entered the market than sellers obviously and more buyers went in (based on greed) and its a kind of self fulfilling, greed sets in (its an emotion) the mind set of immature traders is "oh look price is rising I can make money" so they buy more which feeds on itself and price accelerates eventually though the profit takers start to sell this happened big time on Tuesday the share price hit $604.41 (resistance, last gasp buyers) then bears moved in an drove the share down to 594.41 which is where it settled at the bell. The next few days the selling really started (based on fear) and we have had 3 downs days with lower lows and lower highs, each day since. The traders who bought in at $600 thru $604.41 bought at resistance levels based on greed and it look like it will head down to short term support at about $573. If it breaks thru that price, it might gap down to the resistance level of previous sideways trend which was around about $545. If it can keep above $573 it will most likely trend sideways between $573 and just over 600. As I stated, the key pivot point will be around $573 and that will be a good indicator of where the share will trade the next few weeks. Longer term depends on next results, The analysts are basing their forecast on earnings projections and their in house formulae they use to calculate future share prices based on those earnings,
Thank you for your time
Another blog that heard something different than what AI's headline represents Canaccord said. AI loses this game of telephone. "A top selling smartphone" is not the same as "THE top selling smartphone." Set the record straight, AI. People (like Thestreet) have been spreading your misinformation (without citing you).
http://www.macnn.com/articles/14/05/08/samsung.galaxy.s5.keeps.5s.sales.from.going.higher/
I'm no financial anal-ist, but it's clear to me that AAPL will run north of $700 in the next few months.
A year from now... I definitely agree with you.
If Apple runs north of $700 in a year, I will be very pleased. You, of all people, are more optimistic than me!