“JMP Securities’s Alex Gauna today reiterates a Market Outperform rating on shares of Apple, and raised his price target to $150 from $135, the highest price target on the Street, based on what appears to him to be an ‘explosive’ quarter in the making for the company as far as sales of the iPhone 6, and also, to some extent, sales of the iPad,” Tiernan Ray reports for Barron’s.
Ray quotes Gauna thusly: We raised our estimates and price target on the stock, following a review of what we saw from Black Friday to Cyber Monday. Demand is exceptionally strong both in the U.S. and China, with lead times at higher memory count models of the iPhone 6 Plus and also the iPhone 6. Also, there’s been strong demand for the iPad Air 2. The iPhone 6 Plus is stocked out at all three major carriers in China, and we’re seeing the longest lead times we’ve seen at Apple stores there, so very consistent with what we’ve seen in U.S. Overall, we’re seeing very limited supply, with lead times still very strong. That suggests average selling prices (ASPs) can be very strong for Apple, and the gross margin potential is high. Another observation is that at Best Buys in major metros in NYC, Chicago, Dallas, LA, etc., 90% or more of them, the iPad Air 2 is stocked out, as is the iPad Mini 3. We like what we’ve seen. China Mobile (CHL) subscriber adds have been accelerating, through October, and we think iPhone is a big part of that. Once we see November and December, we think it will turn out to be be explosive this quarter for Apple.
Read more in the full article here.