Wall Street may be underestimating the potential impact of new 5G-capable iPhones on Apple’s earnings, according to Morgan Stanley. The company is expected to unveil the first generation of 5G iPhones at a special virtual-only event next Tuesday, October 13th.
On Thursday, [Morgan Stanley analyst Katy Huberty] writes in a research note that an analysis of iPhone product mix and pricing suggests that the Wall Street consensus estimates for both units and average pricing for Apple’s September 2021 fiscal year are too low. She raises her fiscal 2021 revenue and profit estimates by 2%. Huberty now sees fiscal 2021 profits of $4.07 a share, which is 20 cents above the Street consensus.
Huberty also upped her estimate on fiscal 2021 iPhone shipments to 220 million units, from 218 million. She keeps her Overweight rating and $130 price target on the stock.
“We expect this fall’s launch to be the most significant iPhone event in years,” she writes. Like other analysts, she expects four new models—the 5.4-inch iPhone 12 mini, the 6.1-inch iPhone 12, the 6.1-inch iPhone 12 Pro, and the 6.7-inch iPhone Pro Max, which will have the largest display ever for an iPhone.
MacDailyNews Take: Yup.
Yes, more than ever, the world needs Apple’s annual iPhone cycle. And we bet the world will get it, too. With “iPhone 5G,” the multi-year Mother of all iPhone Super Cycles will finally be here this autumn! — MacDailyNews, March 27, 2020