UBS Raises Target On Apple To $127 Amid Evidence Lab Survey

UBS is the latest brokerage to boost its price target on Apple Inc. AAPL shares, from $115 to $127 citing initial demand indicated "encouraging Evidence Lab analysis of search volumes."

Interestingly, analyst Steve Milunovich sees less interest for iPhone 7 compared to iPhone 6. However, the interest level is better than the iPhone 6S.

The analyst indicated he isn't worried about the claims that Apple sold out its Plus and that most carriers witnessed preorder growth on the back of a recall from Samsung's Note 7. He pointed out that Verizon isn't witnessing any significant change in the demand pattern.

Related Link: Buy Apple On The iPhone 7 Launch, As Demand Is Exceeding Supply: Citi

UBS also isn't sure about the response from China where the tech bellwether hasn't been aggressive in promoting the latest iPhone 7 models. The analyst thinks the final count of iPhone buyers upgrading their device will come down.

"We are increasing our upgrade estimate from 41% to 44%, our F17 EPS estimate to $9.30, and our target price to $127. Increased procurement could reflect demand or just timing. The UBS Asia tech team's latest estimates show iPhone 7 procurement plans for F17 have increased from 80mn to 89mn, mainly due to 7 Plus needs," UBS said in a note.

This is better than 87 million procurement recorded for 6S, although it was weaker than the 93 million recorded for iPhone 6. The brokerage believes the increased procurement is also because of mass production citing strict waterproofing requirements apart from "complex dual camera designs."

The brokerage expects the current uptick in stock movement to fade pointing out the history. However, it could move up before the earnings announcement.