Evercore raises Apple price target to $125, sees bigger iPhones leading to bigger sales

Posted:
in AAPL Investors edited October 2014
Bigger iPhone 6 screens are likely to result in a bigger upgrade cycle for Apple, in the eyes of Evercore Partners, which increased its price target to $125 on Tuesday and advised investors to buy in.




Analyst Rob Cihra reiterated his "overweight" rating for AAPL stock in his latest research note to investors, a copy of which was provided to AppleInsider. He also increased his estimated iPhone sales for the September quarter to 39 million units, which would be a 15 percent year over year increase.

Looking forward to the December quarter, Cihra sees Apple selling a massive 65 million iPhone units, which would be a 27 percent year over year increase and a new all-time record for the company.

But to Cihra, even more impressive than sales growth would be if Apple is able to maintain or even grow its average iPhone selling price. The analyst noted that the broader smartphone market is showing growth only at the lower end, and companies outside of Apple are largely stagnant in terms of high-end sales.




Many analysts expect that the average selling price of the iPhone will increase with Apple's new lineup. This year, the company is offering more capacity than ever, and is also charging a $100 premium for the 5.5-inch iPhone 6 Plus.

For Cihra, the 4.7- and 5.5-inch screen sizes in the new iPhone 6 lineup hit a "sweet spot" with consumers, which he believes will result in a "major upgrade cycle" for the more than 300 million worldwide iPhoen users.

Apple is scheduled to report its results for the fourth fiscal quarter of 2014 on Oct. 20. Cihra's overall estimates call for the company to report revenue of $40.1 billion, up 7 percent year over year, and earnings per share of $1.31, which would be a 11 percent increase from the September 2013 quarter.

Looking forward to fiscal 2015, Cihra sees Apple's revenue reaching $210 billion, which would be a 16 percent year over year increase. He's also forecast Apple to earn $7.53 per share.
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Comments

  • Reply 1 of 31
    I guess the next question would be... can Apple have enough phones produced to get over 60 million sold.
  • Reply 2 of 31
    MacProMacPro Posts: 18,223member
    I guess the next question would be... can Apple have enough phones produced to get over 60 million sold.

    Especially as 50% are being rejected in quality tests as they fail the bend test /s ;)
  • Reply 3 of 31
    Quote:
    Originally Posted by digitalclips View Post





    Especially as 50% are being rejected in quality tests as they fail the bend test /s image

     

    I think it's funny that you felt it was necessary to use the sarcasm tag.  Har!

  • Reply 4 of 31
    Quote:

    Originally Posted by island hermit View Post



    I guess the next question would be... can Apple have enough phones produced to get over 60 million sold.

     

     


    I figured a 20% YoY increase.  28% is huge

     

    Next quarter.  That's a run/sell/deliver rate of 700,000 a day.  

    The only way I see that happening is if they plan on cannabalizing  the iPad Mini line (and/or don't upgrade it next month).

     

    Obviously about 30% of that is 5s/5c  sales.  Stocking stuffers, and mom/dad switching from android to a 6P and dragging children along with a .99 iPhone 5c.  I'm confident the low end will move... I may get 5s for my wife when I get a 6 for me, just so both of us have TouchID.

     

    So 500,000 phones a day are the number for the new line.

     

    The key is china.  If they are ready for the Chinese market Oct 17th, and are able to keep the pipeline filled from the factory to the markets, then it's a very real possibility.  If it slides, or numbers there are not good, no way.

  • Reply 5 of 31
    Quote:

    Originally Posted by TheOtherGeoff View Post

     

     

     


    I figured a 20% YoY increase.  28% is huge

     

    Next quarter.  That's a run/sell/deliver rate of 700,000 a day.  

    The only way I see that happening is if they plan on cannabalizing  the iPad Mini line (and/or don't upgrade it next month).

     

    Obviously about 30% of that is 5s/5c  sales.  Stocking stuffers, and mom/dad switching from android to a 6P and dragging children along with a .99 iPhone 5c.  I'm confident the low end will move... I may get 5s for my wife when I get a 6 for me, just so both of us have TouchID.

     

    So 500,000 phones a day are the number for the new line.

     

    The key is china.  If they are ready for the Chinese market Oct 17th, and are able to keep the pipeline filled from the factory to the markets, then it's a very real possibility.  If it slides, or numbers there are not good, no way.


     

    Theoretically it seems possible... but from what I'm reading... the rejection rate of parts is very high.

     

    It must drive Tim Cook nuts.

  • Reply 6 of 31

    It's a fool's game to bet on individual stocks.

  • Reply 7 of 31
    Quote:

    Originally Posted by pfisher View Post

     

    It's a fool's game to bet on individual stocks.




    Yes. Much better to invest in them instead.

  • Reply 8 of 31
    Quote:

    Originally Posted by pfisher View Post

     

    It's a fool's game to bet on individual stocks.


    True, generally (unless you have a bug in a Fortune 500 boardroom somewhere). But AAPL may be different. Name a better large company. Quality products, well-designed and manufactured, and once you go Apple, you don't look back. I, like others, see growth. Of course, anything can happen. But the safety and return of index funds sometimes can be overshadowed by a stock like Apple. I have some of both.

  • Reply 9 of 31
    Well, I must say that it is nice to see someone not obsessed with bendgate (except for myself, of course... Wait, why did I even have to mention it? Now I've sullied this whole article). But really, it is exactly what I needed to read this morning - some good news for Apple. Now this is a feeling I'm used to!
  • Reply 10 of 31
    In England, you'll wait four weeks for a new iPhone. I've just cancelled my order because of the
    software upgrade debacle. As it is, I'm left with my current 4S not functioning properly.
  • Reply 11 of 31
    pmzpmz Posts: 3,433member
    Quote:

    Originally Posted by Madmanmoon View Post



    In England, you'll wait four weeks for a new iPhone. I've just cancelled my order because of the

    software upgrade debacle. As it is, I'm left with my current 4S not functioning properly.



    Well congrats on the dumbest thing I've read yet today. That's an achievement, believe me.

  • Reply 12 of 31
    Quote:

    Originally Posted by Madmanmoon View Post



    In England, you'll wait four weeks for a new iPhone. I've just cancelled my order because of the

    software upgrade debacle. As it is, I'm left with my current 4S not functioning properly.

    My advice, don't upgrade an old device with new software unless you read that it will not adversely affect it. All reports that I read stated that iOS8 would really slow down the iPhone 4S, plus make its screen seemed cramped. (In technology, "Old likes old, new likes new.")

     

    When you've been on the planet a while, you'll find out that software upgrades from anyone are sometimes flawed and one should always wait a few days to see if the 'pioneers got shot by the Indians.'

  • Reply 13 of 31
    Originally Posted by AppleInsider View Post

    Bigger iPhone 6 screens are likely to result in a bigger upgrade cycle for Apple, in the eyes of Evercore Partners...



    Why, when bigger phones have always led to smaller sales? What’s their justification for this?

  • Reply 14 of 31



    Why is what I wrote dumb?

  • Reply 15 of 31
    slurpyslurpy Posts: 5,143member
    Quote:
    Originally Posted by Tallest Skil View Post

     



    Why, when bigger phones have always led to smaller sales? What’s their justification for this?


     

    Do HONESTLY can't acknowledge that 4.7" AND 5.5" phones cover a wider part of the market than 4" phones? Really?

  • Reply 16 of 31
    gwmacgwmac Posts: 1,796member

    I hope this will finally silence the 4" trolls who insist most people weren't demanding larger phones. 4" is EOL. Deal with it. 

  • Reply 17 of 31
    pfisher wrote: »
    It's a fool's game to bet on individual stocks.

    Only if they are not AAPL.
  • Reply 18 of 31
    Originally Posted by Slurpy View Post

    Do HONESTLY can't acknowledge that 4.7" AND 5.5" phones cover a wider part of the market than 4" phones? Really? Why do you pretend to be obtuse? 



    No, I didn’t say anything about that whatsoever. We know, historically, that they don’t, though.

  • Reply 19 of 31
    madmanmoon wrote: »
    Why is what I wrote dumb?

    Get back online or get on the phone or go to an Apple Store and get your iPhone 6, man! You will not be disappointed!!! It is AMAZING!! I have been using mine since launch day and it has already stood up to a ton of abuse from my own stupidity and my kid's aggressiveness. iOS8 is a dream after the second update. It is a wonderful experience. If you do by some anti-miracle come to dislike it you can message me personally and tell me, "I told you so," but right now, "I'm telling you so!" GO GET ONE!
  • Reply 20 of 31

    Well, I'll leave aside my unanswered question.

    Since upgrading to iOS8, I've had more trouble than I have ever had with a phone. My problems are not isolated, I'm not a techie so can't fix them. I had intended getting an iPhone 6+ on launch day, but my local store ran out in twenty minutes, as did all other local stores. I upgrade to the new software on my 4S and ended up with an unusable phone that doesn't play music, didn't make calls, apps don't work, bad reception. This from upgraded software. I'm still left with a phone that doesn't function as it did pre-upgraded software. I still want a 6+, but I'll wait until next year, hopefully by then it will be working with my VW car, my Pure radio, my apps and all will be fixed. If that makes what I wrote dumb, I plead guilty.

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