Wells Fargo believes 'iPhone 7' will reaccelerate Apple growth, sell 80M+ this holiday

Posted:
in AAPL Investors
With Apple set to report its first-ever year-over-year decline in iPhone sales this afternoon, analysts continue to look forward to the anticipated "iPhone 7" launch in hopes that it will re-stimulate growth.




Wells Fargo analyst Maynard Um issued a note to investors this week, ahead of today's earnings report, in which he said he expects the "iPhone 7" will see a return to growth for Apple in the December quarter. Apple has already said iPhone sales would decline in the just-concluded March quarter.

Currently, he projects Apple could reach as many as 82.2 million iPhone units in the holiday frame. While that's a few quarters out, he believes his forecast is higher than market expectations.

Um believes analysts on Wall Street are too pessimistic, and potential growth following an "iPhone 7" launch is not yet priced into the company's shares.

For the March quarter, Wall Street is expecting sales of $52 billion and earnings per share of $2.00. The market also expects Apple will have sold 50 million iPhones in the three-month span, a decline from 61 million a year ago.

Um's own estimates call for Apple to have sold $51.7 billion with earnings per share of $2.01.

Looking forward to Apple's third fiscal quarter of 2016, the Street is currently expecting $47.4 billion in sales and $1.76 EPS. Um and Wells Fargo are forecasting $45.2 billion and $1.64.

Apple will report the results of its March quarter, and provide guidance for the June quarter, after markets close today. A conference call with the company's executive team to discuss the results will begin at 5 p.m. Eastern, 2 p.m. Pacific. AppleInsider will have full, live coverage of the event.

Wells Fargo has maintained an "outperform" rating for AAPL stock, with a valuation range of $120 to $130.

Comments

  • Reply 1 of 19
    "Wells Fargo analyst Maynard Um issued a note to investors this week, ahead of today's earnings report, in which he said he expects the "iPhone 7" will see a return to growth for Apple in the December quarter." Who'da thunk it... the man's brilliant!
  • Reply 2 of 19
    jungmarkjungmark Posts: 6,716member
    Analysts are a joke. One jokers says the 7 is "nothing new" and another says it will be super duper successful. 
  • Reply 3 of 19

    jungmark said:
    Analysts are a joke. One jokers says the 7 is "nothing new" and another says it will be super duper successful. 
    I maintain a "doom" rating on AAPL through 2017.
  • Reply 4 of 19
    rogifan_newrogifan_new Posts: 4,194member
    sog35 said:
    This is silly talk.

    Who gives a crap how many phones Apple sells in a specific quarter.

    Its all about GROWING THE USER BASE. Then selling services to this user base.

    This has been an absolute failure by Tim Cook. Apple is not a widgets company only concerned about increasing units sold. Apple is a life style and PLATFORM company. The emphasis should be on GROWING THE USER BASE not units sold in a 3 month window.

    As long as the user base keeps growing and the services keep growing Apple will be the King.

    Tim Cook needs to focus on growing the user base and improving the ecosystem of services. Enough with this simpleton bean counter crap (iPhone units).
    Quit spinning the stupid Wall Street nonsense. Services exist to make buying an Apple products more attractive not to be huge revenue generators in and of themselves. When Apple was selling record numbers of iPhones you weren't banging on about services and neither was Wall Street. But now you're in complete panic because Tim Cook hasn't transformed Apple in to some mythical "services" company. Where is the evidence enough people will buy Apple "services" to turn it into some iPhone like revenue generator? Apple has over 800M credit card accounts on file. Yet only roughly 2.5% are Apple Music subscribers. I'm very skeptical Apple is going to get a large portion of the user base to pay for a bunch of add on "services". John Kirk over at Techpinions has a great piece up about this. https://techpinions.com/apple-shouldnt-cross-that-road-till-they-come-to-it/45209

    If Apple needs to get away from the boom and bust of seasonal product cycles and more predictable revenue streams then it should expand the iPhone upgrade program to other product line.
    afrodri
  • Reply 5 of 19
    mubailimubaili Posts: 399member
    Wrong. I am super happy with my 6S plus, it has everything I could ask for a phone and some more. I will break my upgrade every year tradition this year and wait till it completely died out to upgrade. Long live iPhone 6s Plus and Apple is doomed. Sorry. I will upgrade the Watch though if it can untether from iPhone.
  • Reply 6 of 19
    gatorguygatorguy Posts: 21,117member
    Since we're also talking the iPhone 6s for whatever reason you can pick one up for just $1 at Best Buy as long as you'd be content with Sprint. 

    EDIT: Or the brand-new 6SE for just a dollar. Nice deals.
    edited April 2016
  • Reply 7 of 19
    If Apple needs to get away from the boom and bust of seasonal product cycles and more predictable revenue streams then it should expand the iPhone upgrade program to other product line.
    Bingo!

    And, I suspect, that is exactly what Apple is preparing to do ...


    My oldest grandson picked up an iPad Pro 9.7" yesterday -- His Mom paid for it.  

    Apple has a 0% financing option for other products including the iPad,  but there is no upgrade option nor no AppleCare -- and it requires that you open another credit card account ...

    She had little time on her parking meter, so that was too much hassle -- paid with ApplePay instead.


    Apple could also expand the Upgrade Program to other countries.


    Finally, they could sweeten the pot by offering tie-ins and other goodies, such as:
    • Additional iCloud capacity
    • Free 4G access to iCloud (through carriers)
    • Subsidize carrier activation charge for new iDevice
    • Bonus for paying with ApplePay

    edited April 2016 pscooter63
  • Reply 8 of 19
    cnocbuicnocbui Posts: 3,613member
    jg111157 said:
    cnocbui said:
    Who makes a better laptop than the Macbook Pro?
    Your joking right? The best Macbbok Pro I own is the one I purchased in 2008.
    I wasn't joking, but you obviously are.

    I thought you didn't pay, but had a fairy hood-brother?
    edited April 2016
  • Reply 9 of 19
    gatorguygatorguy Posts: 21,117member
    cnocbui said:
    jg111157 said:
    cnocbui said:
    Who makes a better laptop than the Macbook Pro?
    Your joking right? The best Macbbok Pro I own is the one I purchased in 2008.
    I wasn't joking, but you obviously are.
    The best MacBook is the one you have with you.  ;)
    cnocbui
  • Reply 10 of 19
    Phil Knight really admires Apple, he said it today on CNBC. I take that to mean Apple despises its competition just as Knight says he does, because in both cases their competition is a hairs breath away from eating their lunch because both companies are beyond arrogant at this point, having launched themselves on the backs of exploited overseas labor, which Phil today says he now regrets. Whatever.
  • Reply 11 of 19
    I think the key is if they have a new designed form factor and some new compelling features or not. It's gonna be big if they hit on both of those. But after all the evolution of smartphones up till now, it's gonna be very hard to please the public with what known tech is feasibly in the new 7. I hope they somehow reduce the size of the top/bottom bezel making the Plus easier to pocket. 
  • Reply 12 of 19
    foggyhillfoggyhill Posts: 4,767member
    Didn;t dumbass Kuo say 190M for the year, that would make him off by what, 40%!!
    Man, the little "god" would have fallen hard if that happens.
  • Reply 13 of 19
    fastasleepfastasleep Posts: 3,171member
    So do I buy more AAPL today or tomorrow...
  • Reply 14 of 19
    mj webmj web Posts: 918member
    I just bought a Prince song on iTunes for $1.29 and upgraded iCloud for $.99 a month, both of which are accretive to AAPL's bottom line.
  • Reply 15 of 19
    I would not bet the farm on it, short term, AAPL has been posting lower lows and lower highs for the last 8 days except one day when there was a slight higher high, it is now  intraday below 105 psychological level and also the 50MA, next support is 100, if it breaches below  that 100 then technically we would have a 10% correction. Nothing to stop it going to 95 or  perhaps even 90 from that point especially if she of the pigs who bought at the top panic and get slaughtered.
  • Reply 16 of 19
    sog35 said:
    So do I buy more AAPL today or tomorrow...
    I'm waiting for $100 or lower.

    Of course that may never happen by that's my price. 


    I will scale in half at 95 and if it goes lower another half at 90
  • Reply 17 of 19
    Phil Knight really admires Apple, he said it today on CNBC. I take that to mean Apple despises is competition just as Knight says he does, because in both cases their competition is a hairs breath away from eating their lunch since both companies are sassy arrogant at this point.
  • Reply 18 of 19
    I think the whole thing is that apple has been seriously lagging it on the high end user side. They need to appease those who seek something new. Now its just the same old crap. 3D touch? "Live" photos? Etc etc. Where's the new? A smart watch? please. 

    The iPhone 6 was pretty good, crappy battery life. 6S is quicker, still crummy battery life. The watch personally is a joke in my opinion, I was not at all impressed with my 42mm version that I bought new. I don't know how people think iOS is the best OS out there. I'm a longtime apple user and have never thought that. 

    Now android side offers so much more than apple its insane. Grandma can purchase the SE and have fun with that, but now the competitors on the high end side really have caught up to and far surpassed apple. Its undeniable now. Apple is having trouble putting stuff out like they really know how to lead anymore. It doesn't matter how they situate their business, people are going to flock to their best option. 

    Apple removing their home button, the audio jack, ramping up the meh iphone camera, switching to OLED displays, increasing the battery life, adding IP68 rating, apparently working with a six core processor for a future iPhone...this all sounds like mimicking Samsung excepting the audio jack removal. 

    I'm running both current iOS (on an iPhone) and Samsung android marshmallow right now bc I want to see the differences, and iOS bites it big time.

    Apple should stop trying to make the iPhone paper thin and just make the freaking thing good. Their official battery case for the iPhone is uglier than the Chinese knockoffs on eBay. By simply making it they are admitting people want longer battery life. It has become industry standard recognition that iOS is a walled garden, why not shake it up a bit and make iOS more flexible. I think apple has it in the fingerprint recognition dept, but they definitely need work in other areas.

    Also, will apple pay ever be like Samsung pay where you don't need NFC to use it? More than half of the places I've gone to that accepted apple pay the cashiers either don't know how to do an NFC transaction or the NFC component on the register is broken. With Samsung pay you can literally pay anywhere you could use a credit card. 

    I guess we will see with the note 6. Depending on that, the iPhone 7 (or even 8) is likely to be moot at that point if most of the rumors are true about the specs. 

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