UBS increases Apple price target to $170, sees 'iPhone 8' commanding premium pricing

Posted:
in AAPL Investors
In anticipation of a pricey flagship iPhone later this year, investment firm UBS increased its price target for AAPL stock on Monday, advising investors to buy in before the launch of the highly anticipated "iPhone 8."




With the "iPhone 8" rumored to start at $1,000 and up, analyst Steven Milunovich believes the average selling price of Apple's entire iPhone lineup could skyrocket. His estimates call for the iPhone ASP to grow to $730, up considerably from the $659 ASP seen so far in fiscal 2017.

However, Milunovich doesn't believe the "iPhone 8" will start at $1,000 -- contrary to rumors, he believes the pricing will begin closer to $870. He believes Apple will sell a maximum-capacity 256-gigabyte model for $1,070.

Still, that would be a considerable step up from the current iPhone lineup --the iPhone 7 starts at $649, while the larger iPhone 7 Plus begins at $769. If Apple sticks to those price tiers for this year's "iPhone 7s" series, Milunovich sees the all-new "iPhone 8" commanding a $100-plus premium.




Milunovich predicts that iPhone sales will grow by 15 percent in fiscal year 2018, with the new flagship "iPhone 8" with OLED display predicted to account for 45 percent of total sales.

In particular, he believes iPhone sales will grow by 30 percent in China, where sales have lagged as consumers await a new design.

Accordingly, UBS has increased its price target on shares of AAPL to $170, up from a previous forecast of $165. As of Monday morning, the company's stock was trading north of $153.

Comments

  • Reply 1 of 9
    512ke512ke Posts: 782member
    Hmmm you can buy 1 iPhone 8 or 5.8 shares of APPL. If so I'd take the stock. 
  • Reply 2 of 9
    iPhone 7s: 32 GB $649
    iPhone 7s: 128 GB $749
    iPhone 7s: 256 GB $849

    iPhone 7s Plus: 32 GB $769
    iPhone 7s Plus: 128 GB $869
    iPhone 7s Plus: 256 GB $969

    iPhone XE: 128 GB $969
    iPhone XE: 256 GB $1069


  • Reply 3 of 9
    sog35 said:
    iPhone 7s: 32 GB $649
    iPhone 7s: 128 GB $749
    iPhone 7s: 256 GB $849

    iPhone 7s Plus: 32 GB $769
    iPhone 7s Plus: 128 GB $869
    iPhone 7s Plus: 256 GB $969

    iPhone XE: 128 GB $969
    iPhone XE: 256 GB $1069


    Looks about right.

    The $100 gap between the 7 and X is reasonable.
    I think so too, and it explains where the "$1000 price" talking point comes from.
  • Reply 4 of 9
    RTCRTC Posts: 14member
    512ke said:
    Hmmm you can buy 1 iPhone 8 or 5.8 shares of APPL. If so I'd take the stock. 
    Why not both?  ;)
  • Reply 5 of 9
    Apple isn't a FANG stock so raising the price target won't give the stock any guarantees of going up anywhere near that price target. By the time Apple stock reaches $170, both Amazon and Alphabet will be well past $1000 a share. Facebook and Netflix will probably be at $180 by then. Apple will be trailing way behind. Anyway, to me, paying $1000 for an iPhone isn't that big a deal as long as I get satisfactory daily usage out of it for three years. It's that damn monthly cost for services that I don't much care for. My Apple stock dividends per quarter are multiples higher than the price of some $1000 high-end iPhone so that initial cost is already covered. I always look at it as the longer you keep a product the cheaper it becomes in the long run. I'd have no need to replace an iPhone every single year. It should last me a long time if I take good care of it which I usually do to any product that's serving me well. Some writer was saying the next iPhone is "super-expensive" which is quite ridiculous. I wouldn't think $1000 is super-expensive for an American consumer. Maybe for someone in India or Africa but not the U.S.
  • Reply 6 of 9
    brucemcbrucemc Posts: 1,527member
    I think Apple is set to perform well in 2018 and 2019 on the financial front, but not just because of the next couple of releases of iPhone.  Rather, Apple show see good performance across all lines
    - new iPhones should allow for some high single digit growth averaged over a couple years (I don't think a super cycle like the 6 is in the offing)
    - wearables are showing signs of taking off. Expect very good AW growth and explosion of AirPods
    - iPad stabilization. Perhaps some revenue growth, but at least ending the bleeding. 
    - Services now contributing meaningfully (growth has been there for some time, but the size is now moving the needle)
    - Mac hopefully coming off of a low with some very small growth 

    It is the narrative about the new categories and services, together with some small growth of the other lines, which should drive the stock higher. 
    muthuk_vanalingam
  • Reply 7 of 9
    SpamSandwichSpamSandwich Posts: 31,087member
    Expect pandemonium and riots on Wall Street if there is no iPhone 8. The sure bet says iPhone 7S and 7S Plus. Everything else is unverified handwaving.
  • Reply 8 of 9
    Expect pandemonium and riots on Wall Street if there is no iPhone 8. The sure bet says iPhone 7S and 7S Plus. Everything else is unverified handwaving.
    If you believe that at this stage, you're just not paying attention. KGI Securities would not be talking about the 7s, 7s Plus, and "8" all being released this year, if they weren't being released this year.
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