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