Brean Capital tells investors to ignore 'noisy' supply chain, focus on longterm iPhone success
Recent concerns stemming from Apple's supply chain haven't swayed Brean Capital, which believes iPhone sales will continue to grow another 5 to 10 percent in calendar 2016.
Analyst Ananda Baruah stood by Apple this week in a note to investors, a copy of which was provided to AppleInsider, in which he maintained a target price of $170. He said that although the company's supply chain may be "noisy," he remains confident in his longterm "buy" thesis on shares of AAPL.
To Baruah, Wall Street expectations for Apple are "materially low" through 2017. While he sees iPhone growth of more than 5 percent, Wall Street consensus sees iPhone shipments slipping between 3 and 5 percent.
Specifically, Baruah believes Apple shipped about 233 million iPhone units in calendar year 2015, which he sees growing to about 250 million in 2016. He sees Apple's sales being boosted next year by the debut of a new 4-inch iPhone, which he believes could provide as many as 30 million incremental units to the year if it launches in the March-to-April timeframe.
To him, Apple's rumored 4-inch iPhone is a "done deal," and will be the primary reason Apple sees continued growth next year.
Most analysts continue to be bullish on the long-term prospects for Apple, but a number of investment firms have recently expressed concern over shorter-term iPhone sales. The trend has been driven by estimates being cut by a number of key Apple suppliers.
Firms that have cut their estimates in recent weeks include FBR & Co., RBC Capital Markets, J.P. Morgan, and Morgan Stanley.
Standing more firmly behind Apple, however, has been Gene Munster of Piper Jaffray, who advised investors not to worry about supplier data. He believes it's unwise to read to heavily into vague estimates from Apple partners.
That's the same opinion repeatedly shared by Apple Chief Executive Tim Cook, who has said that reading into supply chain data leads to erroneous conclusions.
"The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."
Analyst Ananda Baruah stood by Apple this week in a note to investors, a copy of which was provided to AppleInsider, in which he maintained a target price of $170. He said that although the company's supply chain may be "noisy," he remains confident in his longterm "buy" thesis on shares of AAPL.
To Baruah, Wall Street expectations for Apple are "materially low" through 2017. While he sees iPhone growth of more than 5 percent, Wall Street consensus sees iPhone shipments slipping between 3 and 5 percent.
Specifically, Baruah believes Apple shipped about 233 million iPhone units in calendar year 2015, which he sees growing to about 250 million in 2016. He sees Apple's sales being boosted next year by the debut of a new 4-inch iPhone, which he believes could provide as many as 30 million incremental units to the year if it launches in the March-to-April timeframe.
To him, Apple's rumored 4-inch iPhone is a "done deal," and will be the primary reason Apple sees continued growth next year.
Most analysts continue to be bullish on the long-term prospects for Apple, but a number of investment firms have recently expressed concern over shorter-term iPhone sales. The trend has been driven by estimates being cut by a number of key Apple suppliers.
Firms that have cut their estimates in recent weeks include FBR & Co., RBC Capital Markets, J.P. Morgan, and Morgan Stanley.
Standing more firmly behind Apple, however, has been Gene Munster of Piper Jaffray, who advised investors not to worry about supplier data. He believes it's unwise to read to heavily into vague estimates from Apple partners.
That's the same opinion repeatedly shared by Apple Chief Executive Tim Cook, who has said that reading into supply chain data leads to erroneous conclusions.
"The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."
Comments
Who knows, you might even get it passed. Ready to run the biggest company in the world then?
If not, just shut up and sell any Apple kit you own. You obviously don't like the company, the products, the management, just about everything to do with the company,
Apple is stronger than ever. The iPhone 6S is a killer device and with all the mobile computing profits falling into Apple's lap, the door for Apple has been kicked wide open.
Time will prove them wrong. Amazon has left the mobile phone market. Microsoft phone is dead in the water. The others are being bled dry. The iPhone is the spear. It may take a bit of a breather next year, but the game is over.
The future: Hilary is pro Wall Street and so are her Republican competitors. A repatriation tax holiday is likely within two years. Federal tax coffers will get a bump and Apple will have $100-$175B to work with. Apple could buy Adobe, FireEye, Sales Force, and Tesla. Or IBM. Dumb ideas, maybe, probably, but the point is that Apple could "buy" $80B in revenue and add that to the top line.
I think the future doesn't look too bad.
Contrary to popular belief, the GFC never ended. It is still ongoing. It is simply the sheer momentum of China that served to disguise that fact but it has petered out now. Nothing could more clearly illustrate that than the global commodities situation. Brazil's economy is back to normal. Australia's is just limping along, Canada likewise. The EU economy is stuck at zero and I don't think any amount of the stupid form of quantitative easing they are engaged in will have any effect. The US is about the only economy that has shown any signs of life recently and I suspect that is only temporary.
As has already been pointed out to you, Apple's income is a one-trick-iPony. The 6 series has been extremely successful because of the jump in screen size and processing power. This very success may well represent a peak, or maybe plateau, because the capability of high end phones has reached that same point PC's with Intel Core 2 Duo powered processors did, in that they had enough processing power for the majority of people's needs to the point they didn't feel any need to upgrade.
Reading several comments on other sites I have seen people say the upgrade from their 6 to 6+ was of negligible real benefit because the 6 was already so capable. Coming up with meaningful improvements that can persuade hundreds of millions of people to upgrade is going to become increasingly difficult, I think. The rumours about a move to OLED screens is solely because of the need for something new and differentiating, not because the tech is ready - Anandtech reviews would suggest the tech has been ready for at least two years now. I wouldn't be surprised if OLED screens come in 2016, not 2017, such is the need for something new to motivate sales.
So given iPhones are very expensive, the world's economy is utterly stagnant, if not actually on the verge of contracting, existing models are very capable and likely meeting most peoples needs, I think the prospects for ever-increasing sales are remote, if not fanciful.
I just registered again on this board only in order to ask you to shut the fuck up- and I think I speak for everyone. Your insanity was cute for a while, but your vile messages are now just nauseating in their pitifulness, and you infect every single thread you post in with your screeching, nasty craziness. It's almost scary how little you understand about anything, your childish assumptions (IF COOK ONLY STATES SUPPLY CHAIN UNRELIABLE APPLE STOCK WOULD BE SO MUCH HIGHER!! COOK IS SITTING ON HIS ASS DOING NOTHING!!!) and the misplaced hatred you have towards Cook.
In the same post you state that Apple makes the best products in the world, as well as the most profitable, and yet Cook is a complete failure of a CEO and "pathetic". How the fuck are those 2 statements compatible? Apparently, in your view, the primary job of a CEO is to micromanage short term stock prices, and not run a great company. Your statements about "waste of money" buybacks is hilarious, as if these are short-term focused moves. You've made a fuckload of money on Apple stock, yet you're a spoiled, greedy, nasty piece of work that is now spending all his time and energy throwing barbs at Cook because the stock isn't a fucking daily money-making machine for you. Take my advise- please sell your holdings, so you can shut the fuck up and stop trolling this board with your CAPS-ridden, insane non-sense.
IMHO, the floundering execution of launches like HOMEKIT / Apple TV / movie content / $$ wasters like Beats are dragging the stock down and contributing to the negative narrative.
Wall Street believes that making money and investing in the future are mutually exclusive. To please Wall Street to the degree you want, Apple will have to throw the baby out with the bathwater and abandon the very principles that have brought Apple to its current position. I don't think it's worth it.
Nilay Patel at the Verge just ran a piece about what he thinks the site got wrong in 2015. Two of the things he mentioned: Watch revolutionizing wearables industry; Samsung designing a better smart watch than Apple. For the first one, absolutely nobody was expecting that or predicting it. You won't find one article on the Verge or anywhere else claiming the Watch would be some revolutionary product. Most of the tech press spent 2015 mocking it and mocking the category in general. As far as the second item, that's of course totally subjective. To me the Gear S 2 looks incredibly cheap. And I have yet to see a video of it in use that looks more intuitive than anything else on the market. The tech press just jumped on this rotating bezel as though it was somehow the greatest thing ever that no one had done before. Oh and how many of these 'better than Watch' smart watches has Samsung sold? I've seen more people wearing Fitbits and Watches than anything from Samsung.