Jefferies ups Apple target to $135; set up for huge 5G iPhone sales in U.S., China, and Europe

On Thursday, Jefferies analyst Kyle McNealy repeated his Buy rating on Apple stock and lifted his price target to $135 from $116.25, seeing a “strong setup in key regions” heading into the new iPhone cycle.

Apple logoEric J. Savitz for Barron’s:

“We see historically low upgrade rates and handset subsidies in the U.S. reversing trend, share gains versus Huawei in Europe, and a massive legacy installed base in China looking to upgrade,” he writes in a research note.

In the U.S. market, he says, the upgrade rate has been running around 5% of the installed base per quarter, “well below the 8-10% seen in 2014-2016,” following the launch of iPhone 6. He also notes that carrier device subsidies are also near all-time lows. He thinks those trends are going to reverse “as wireless operators compete for new 5G users and look to monetize the new spectrum they’ve been building out…the new spectrum of course requires new upgraded handsets to leverage the additional capacity.”

As for Europe, he sees Apple as a beneficiary of lost market share at Huawei… And in China, he sees potential for a huge upgrade cycle. “Our proprietary survey work shows there’s a massive installed base of [iPhone] 6, 7, and 8 series devices in China which we expect would be likely to upgrade in the near future. We surveyed 6,000 smartphone users in China in early July. The results show an incredible 75% of iPhone respondents currently have a 6, 7, or 8 series model.”

MacDailyNews Take: Yup.

Just as iPhone this year is all about the camera, next year will be all about 5G. Get ready for the Mother of All iPhone Super Cycles!MacDailyNews, December 23, 2019

6 Comments

      1. Interesting comment.

        I figure in iPhone sells, iPad sells, cause there really is no real way to do in class school safely, the macbooks, as they change to ARM processors, mac pros, iMacs as they change as well, then the services that seem to keep growing, licensing agreements for car play by auto and truck manufacturers, then I remember Steve change the name of the company to Apple, instead of Apple Computer. I realize Apple sells electrical power too and is expanding in that area. With global warming taking place you probably want to stay cool, so they will make money there. As we run out of fresh water it will take power to turn the oceans into fresh water, another big power use, and you probably want to do that as cleanly as possible, solar, wind, Apple.

        I would guess Apple would not want to get into food production, but then again, not everybody needs an electric car, but food, yeap. Maybe the next CEO, well do hydroponics on a large scale.

        Anyway, the power addition makes the sky the limit as taste may change away from Apples electronic gear.

        300+ is more than possible, if apple paid a dollar, a share, per quarter, 200 would happen almost over night.

  1. This is all a plot to destroy apple share price. 5G is red herring. The common person doesn’t give a fig about 5G. Sure techno’dudes do, but no one else does. There will be NO super cycle based on 5G. No one cares.

    The super cycle will come with apple glasses, if they are good, they will likely require the latest phones. That will induce many more people to upgrade.

    5G aint it.

    So when everyone sees that there was NO super cycle for 5G for apple, the market is going to start with it’s “apple is done” campaign of horse***t articles on how below expectations the sales numbers have come in. It’s all a big bs setup for short sellers.

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