Apple Analyst Raises Price Target, Cites Strong iPhone 11 Sales

Apple, Inc. AAPL shares have traded higher in the past month on market optimism about the lower-priced iPhone 11 models. On Wednesday, one analyst said his latest surveys suggest strong iPhone demand, and he’s raising his price target as a result.

The Analyst

Canaccord Genuity analyst T. Michael Walkley reiterated his Buy rating for Apple and raised his price target from $240 to $260.

The Thesis

Canaccord’s North American survey work suggests the iPhone is maintaining its leading market share among customers of all four major wireless carriers.

“With the stronger than anticipated initial sales for the launch of this year’s iPhone lineup, we believe the September quarter results could come in at the high end of guidance,” Walkley wrote in a note.

Walkley said the initial numbers are particularly encouraging given concerns that users would wait for 5G models to upgrade. In addition, investors have been worried about the potential negative impact the trade war would have on demand in China.

Walkley raised his September quarter iPhone unit sales estimate from 41 million to 43 million and his full-year 2019 and 2020 unit sales estimates from 180 million and 198 million to 182 million and 200 million, respectively. In addition, he raised his 2019 EPS estimates from $12.21 to $12.29.

Walkley said the launch of Apple News+, Apple TV+, Apple Card and other services has the company on track to double 2016 Services segment revenue by 2020.

Benzinga’s Take

Apple cutting prices on its new iPhone models year over year for the first time was a big gamble given its negative potential impact on margins. However, the fact that Canaccord is both raising unit sales estimates and raising EPS estimates is an indication the bold move may pay off for Apple investors.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

Related Links:

Apple's Stock Higher On Reports Of 'Much Busier' iPhone 11 Demand

Large Apple Option Trades Mostly Bullish On iPhone 11 Optimism