JPMorgan's Hall Explains How Wall Street Under Appreciates Apple's Story

JPMorgan's Rod Hall was a guest on CNBC's "Halftime Report" segment on Monday to explain why he thinks Wall Street's outlook on Apple Inc. AAPL is too low.

According to Hall, Apple's iPhone cycle remains underappreciated by Wall Street and his own estimates are 15 percent above consensus estimates for 2018. The analyst believes the potential for upgrades to the iPhone 8 are very high and the company can deliver 260 million units during the next fiscal year, which marks a 17 percent year-over-year growth.

Needless to say, Hall noted that his thesis is based on Apple delivering an excellent new iPhone, but so far, all the signs point toward a great new iPhone device.

"If you really beat consensus earnings by 15 percent it doesn't matter so much what the market is doing and people are going to take notice of that," Hall said. "I think the stock will outperform."

What About Services?

Other than the iPhone, Rod suggested that one of the ways Apple's stock can re-rate higher is through higher dividend payments to shareholders over time. In fact, the analyst isn't overly optimistic on Apple's Services segment as many investors continue to have concerns as opposed to the iPhone cycle, which is, in reality, under-appreciated by many, especially after two years of poor user upgrades over the past two years.

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