“It’s amazing what one quarter of outperformance can do for the outlook of a company like Apple,” Tony Owusu reports for TheStreet. “Skies are bluer, grass is greener, and more iPhones will be sold in fiscal 2017 and 2018, according to analysts at UBS.”
“Analysts at the firm raised their fiscal 2017 iPhone sales estimates 5% — to 222 million units from 205 million units sold — while also raising their 2018 expectations 18% — to 264 million units from previous expectations of 240 million unit,” Owusu reports. “‘Our model shows that an iPhone unit decline in F17 probably requires less than 40% of the F15 base to upgrade in two years,’ said analyst Steven Milunovich. ‘This would be a significant lengthening of the upgrade cycle, since we estimate that 50% to 60% of each prior class upgrades in two years. Even estimating that only 41% of the F15 base upgrades in F17 yields upgrade unit growth of 17% next year. The worse F17 is, the better F18 iPhone sales will be, assuming retention rates remain high.'”
Owusu reports, “Milunovich’s raised expectations are contrary to current market talk, as iPhone growth prospects have been heavily scrutinized amid flagging sales and lowered guidance from an array of suppliers.”
Read more in the full article here.
MacDailyNews Take: Skies are bluer, grass is greener, and…
AAPL is like a buoy. Quick, it’s back on the surface! You there, analyst, and you, too, swim down and tug on the chain! Drag it under… lower, lower… Good! Now, quick, everybody jump on, and we’ll take a ride back up to the top again! — MacDailyNews Take, January 9, 2012
At the most basic level, it’s extremely simple: Pump, then dump. Foment, then buy. Rinse, lather, repeat as the SEC sleeps.
“Milunovich’s raised expectations are contrary to current market talk”… Not unexpected. Analysts make noise to be noticed, not to be right.
Trying to give accurate predictions about the future is rather foolish. There are too many unpredictable variables involved. If an analyst wants to take a pessimistic attitude about a company, that’s fine. Just don’t take it as a fact. I almost feel sorry for investors who take analyst opinions about future sales numbers as facts. I would think such detailed sales numbers to be as unpredictable as the weather. Analysts take such a pessimistic attitude about Apple but have such high optimism for a company like Tesla. It’s either being stupid or downright dishonest.
If analysts were as precise as they claim to be I’m sure most investors would have winning portfolios but I know that isn’t the case.
My opinion about Apple is usually at odds with that of analysts, but my investments and trades with AAPL have certainly been winners for me.
If I had followed the advice of the analysts and my stockbroker, I would not have done anything like as well and I got close to being persuaded by my stockbroker’s very strong warnings not to invest in Apple in the first place. If it hadn’t been for the negativity from my stockbroker giving me doubts, I would have made my initial investment in AAPL several months sooner and would have made a much higher initial investment too, which would have resulted in considerably greater returns.