Why This Analyst Says Apple Consensus Estimates Are Too Low

The consensus estimates for Apple Inc AAPL are too low, Citigroup analyst Jim Suva said Wednesday on CNBC's "Squawk On The Street."

What Happened: Suva reiterated Apple with a Buy rating and $170 price target.

Quarterly Expectations: IPhones, iPads and Macs are still selling remarkably well, Suva told CNBC, and Apple launched its AirTag product this quarter with most analysts not factoring in the product potential.

AirTags can be attached to items of importance, which allows owners to track their items using the "Find My" application. Consumers buy the AirTags for $29 and then they spend more money on keychains and other accessories for the product, Suva said. 

"We think that wearables are going to be a big surprise this quarter," the Citigroup analyst said.

Suva told CNBC that he sees revenue upside accelerating and fundamentals will drive the stock higher, as opposed to the market revaluing Apple from multiple perspectives. 

Apple is set to report its quarterly financial results July 27.

Looking Ahead: Beyond the current quarter, the anticipated release of the iPhone 13 in September will be a catalyst for the stock in the second half of the year, Suva said. Expectations are relatively low and Apple's stock tends to perform better when expectations are low, he added.

"We think the iPhone is still going to be a driving force," the Citigroup analyst noted.

Related Link: Apple Shares Hit Record High: What The Street Is Saying

APPL Price Action: Apple is making a new 52-week high in trading today. 

At last check Wednesday, the stock was up 2.49% at $149.26.

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Photo: Courtesy of Apple.