Apple's Sept. 12 Event: 4 Things That Matter

Apple Inc. AAPL's Sept. 12 product event is days away and anticipation is building for both consumers and investors. The company is expected to introduce the much anticipated iPhone 8 along with a new Apple Watch and Apple TV, Bernstein's Toni Sacconaghi Jr. commented in a research report.

4 In Focus

Here are the analyst's four things to focus on:

• 1. Will the iPhone 8 be compelling enough versus the prior generation for consumers to pay a higher price tag considering a higher ASP (average selling price) could add up to 70 cents per share to the analyst's fiscal 2018 estimate of $11.05?
  2. Which geographic regions will be first to receive the iPhone 8 and what impact will this have on the overall supply and gross margins?
  3. Will the Apple Watch 3 offer increased health applications?
  4. What does a new Apple 4K TV product signal about the company's content ambitions?

Stock Reaction

There are three reasons Apple's stock will continue to move higher heading into and potentially exiting the Sept. 12 event, the analyst also noted.

First, the Street's view on the iPhone ASP is likely too conservative and the stock has a history of outperforming in iPhone cycles that exceed investor expectations.

Second, Apple continues to trade below its peak relative multiple during its prior super-cycle iPhone release and at a similar multiple the stock would conservatively be worth $186 per share.

Finally, Apple's other product lines such as HomePod and the Watch along with currency exchange rates will now have the potential to be material to earnings.

Sacconaghi maintains an Outperform rating on Apple's stock with an unchanged $175 price target.

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