RBC raises Apple price target to $123, cites higher than expected iPhone 6 demand

Posted:
in AAPL Investors edited June 2015
RBC Capital Markets on Friday advised investors to stay long on Apple stock, as the investment firm sees multiple catalysts for the company in the near future, starting with the reporting of holiday iPhone sales.

iPhones 2014


With Apple's December 2014 quarterly earnings report fast approaching, analyst Amit Daryanani issued a note to investors on Friday, a copy of which was provided to AppleInsider, in which he raised his AAPL price target to $123, up from $120. In particular, he has big expectations for the company's flagship iPhone 6 and iPhone 6 Plus lineup.

Daryanani believes Apple experienced higher than expected demand for its latest handsets in the December quarter. He pegged buy-side expectations at between 67 million and 68 million iPhones shipped in the holiday quarter, which would be a significant bump up from RBC's own forecast of 64 million units.

The analyst believes the vast majority of iPhones sold in the quarter --?more than 80 percent -- will be the new iPhone 6 and iPhone 6 Plus. He also expects the average selling price to be around $700, bolstered by increased storage options and the $100 premium carried by the iPhone 6 Plus.

Looking forward to the March quarter, Daryanani said that buy-side investors expect Apple to ship between 47 million and 50 million iPhones in the current frame. RBC's own estimates peg shipments at 50 million in the March quarter.

RBC's new $123 price target also reflects future catalysts like the growth of Apple Pay and the upcoming debut of the Apple Watch. Daryanani also noted Apple's typical annual capital reallocation efforts, which are likely to occur in March or April.

RBC has also advised investors of an "upside scenario" for AAPL stock, where it sees shares propelling to $135. Shares of Apple opened at $106.82 on Friday, suffering losses this week after the stock was downgraded by a high-profile Japanese bank.
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Comments

  • Reply 1 of 27
    Upgrade: meh. Downgrade: sale sale sale. Only for Apple!
  • Reply 2 of 27
    pazuzupazuzu Posts: 1,728member
    Way too much emphasis on iPhones alone with these stock calls. Meanwhile Beats sucks, and no new Apple TV. No original content for iTunes like Amazon has i e, Golden Glove best series and now Woody Allen. Digital music is way down. Apple Is way too much leveraged on its iPhone alone.
  • Reply 3 of 27
    hngfrhngfr Posts: 72member
    Juggernaut
  • Reply 4 of 27
    rogifanrogifan Posts: 10,669member
    I think Apple has been pretty clear that they have no interest in getting into the original content business. And Amazon has yet to demonstrate that all the money they're spending on original content is actually increasing prime membership or contributing to the bottom line at all. I doubt investors care about an Amazon TV program winning an award.
  • Reply 5 of 27
    512ke512ke Posts: 782member

    I personally tend to side with the analysts who are forecasting AAPL's rise over the next few months.

     

    One reason is that with the iPhone 6 Apple did not simply upgrade its phone. Rather, Apple entered a whole new product category, the phablet. True, Apple chose not to call the iPhone 6 Plus the iPhablet, but they could have. This is a previously untapped revenue stream for the company.

     

    Other potential catalysts driving AAPL higher include the App Store (the sales of which rose by 50% in 2013), Apple Pay (very quickly expanding), and the watch of course.

     

    I think most analysts are greatly underestimating the potential of smart watches AND other devices.

     

    Finally, I think that Samsung and Android have peaked. The only have market share and sales to lose, while Apple has MUCH to gain. Look what a difference only a few % points market share gains make, when you're Apple, and when it comes to profits.

     

    I wish I had cash to buy more shares of AAPL.

  • Reply 6 of 27
    I'm sure the iPhone will play a big part in the quarter's financials, But what excites me most is in how Apple is also building toward the future in new materials and innovative software, languages and chips. With each new product release Apple gets harder to catch up to, and they may have already passed that point by now.

    What I see is Samsung, for example, trying to best Apple on phones, while Apple is successfully integrating the iPhone deeper and deeper into the infrastructure/ecosystem of the whole Apple experience. So, even if Samsung ever could win the phone battle Apple still wins the war.
  • Reply 7 of 27
    Up, down, up, down. Just like fornicating. Stupid Fornicators. Only because can't use the word f#{|<€r$. Ha! Just did. Lol
  • Reply 8 of 27
    rogifanrogifan Posts: 10,669member
    So is this why Apple is down about 1.5% today when the market overall is up?
  • Reply 9 of 27
    Originally Posted by Rogifan View Post

    So is this why Apple is down about 1.5% today when the market overall is up?

     

    Well, Switzerland just stopped pegging the Franc to the Euro and Greece is having a run on the bank, so who knows.

  • Reply 10 of 27
    rogifanrogifan Posts: 10,669member
    Well, Switzerland just stopped pegging the Franc to the Euro and Greece is having a run on the bank, so who knows.

    I'd maybe buy that everyone else was down too but most tech stocks are up today.
  • Reply 11 of 27
    mpantonempantone Posts: 1,795member
    Quote:
    Originally Posted by Rogifan View Post



    So is this why Apple is down about 1.5% today when the market overall is up?



    No, we have gone over this before.

     

    Investors are weenies.

     

    :D

  • Reply 12 of 27
    Quote:

    Originally Posted by Rogifan View Post



    So is this why Apple is down about 1.5% today when the market overall is up?

    couple of of reasons like no-poach settlement, new xiaomi phone, lower global demand for luxury goods (tiffanys), swiss issue and dont forget that AAPL is still way higher compared to overall market for last year, so some people just securing their profits because it is the important thing you should not forget, when you invest.

  • Reply 13 of 27
    Quote:

    Originally Posted by Rogifan View Post



    So is this why Apple is down about 1.5% today when the market overall is up?

     

    You'd have to go back to October - November 2011 to see a similar situation. Cook came out in October and said that Apple expects a gangbuster holiday quarter, yet the marketmakers kept driving AAPL down until the third week of November. Nothing had changed in the month since Cook's announcement but the MM's knew that the report in January was going to be staggeringly good. Drive it down hard... buy in... drive it up hard and then slowly walk towards the short side.

  • Reply 14 of 27
    Quote:

    Originally Posted by island hermit View Post

     

     

    You'd have to go back to October - November 2011 to see a similar situation. Cook came out in October and said that Apple expects a gangbuster holiday quarter, yet the marketmakers kept driving AAPL down until the third week of November. Nothing had changed in the month since Cook's announcement but the MM's knew that the report in January was going to be staggeringly good. Drive it down hard... buy in... drive it up hard and then slowly walk towards the short side.




    It's collusion without collusion. A pattern is established and investors all pile in and sell off while the suckers who don't know better get burned.

  • Reply 15 of 27
    Quote:

    Originally Posted by SpamSandwich View Post

     



    It's collusion without collusion. A pattern is established and investors all pile in and sell off while the suckers who don't know better get burned.


     

    For years and years I used to watch the market makers charts (for lack of a better description... age) throughout the day and I came to believe that there were signals given in the trades. ie - 37 shares would be sold by X house and the market would go down during the day then 43 shares would be bought by Y house and the market would go up for a period.

     

    Never got definitive proof but I always saw suspicious trades and then I would see reversals. Coincidence... most likely... but...

  • Reply 16 of 27
    Well, here is hoping they can fix the Wifi issues with both my Ipad Mini 2's.

    Finally broke down and bought my first ever Apple products and they are almost unusable.

    Never, Never had such problems with my Android devices.
  • Reply 17 of 27
    Quote:

    Originally Posted by Rogifan View Post



    So is this why Apple is down about 1.5% today when the market overall is up?

    Don't look for logical reasons.  Simply accept that price target upgrades for Apple are meaningless.  It's easy to see Apple's institutional ownership hasn't moved at all despite the talk of a blow-out quarter.  Big investors don't want to invest into a stock they can't make any short term gains from.  Apple has a bum future growth reputation that won't likely change unless Apple gets into some other business that is nearly equal in revenue to their iPhone business.  This is how I see it because I don't know what else it could be.  There are big investors who have said Apple's iPhone business will always be too big a risk for them as long as Android exists.  Bad perceptions about Apple die hard.

     

    However, for all I know, the whole stock market may be a sham because little it it makes any sort of sense to me.  How do they manage to turn profitless companies into huge share price gainers based on future growth considering the future is uncertain?

  • Reply 18 of 27
    Great day to add another 15% to my stake. Come on $150!
  • Reply 19 of 27
    bluefire1bluefire1 Posts: 1,215member
    RBC may be too optimistic. While the iPhone 6 and 6 Plus will likely continue to have exceptional sales, there are no guarantees that the Apple Watch will be a huge mainstream hit, and the leveling off of iPad sales shows no signs of abating.
  • Reply 20 of 27
    foggyhillfoggyhill Posts: 4,767member
    Quote:

    Originally Posted by island hermit View Post

     

     

    You'd have to go back to October - November 2011 to see a similar situation. Cook came out in October and said that Apple expects a gangbuster holiday quarter, yet the marketmakers kept driving AAPL down until the third week of November. Nothing had changed in the month since Cook's announcement but the MM's knew that the report in January was going to be staggeringly good. Drive it down hard... buy in... drive it up hard and then slowly walk towards the short side.


     

    YEs, there is two schemes, Pump and Dump.... And Dump and Pump, Either one is used on Apple regularly... Why? BEcause every news about Apple gets attention and reaction, ideal for those short term traders.

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