Apple: Favorable Mix Expected Ahead of iPhone 12 Launch, Says 5-Star Analyst, , on September 25, 2020 at 1:10 am

By High West Capital Partners
On September 25, 2020
Tags:

With the iPhone 12 launch around the corner, all eyes are on Apple (AAPL). The launch is set to come in the next quarter, and investors are eagerly waiting to see what the tech giant has up its sleeve.5-star analyst Chris Caso, of Raymond James, tells clients that based on production checks conducted across the iPhone supply chain last week, total production estimates are in-line with the Street’s calls. That being said, he points to mix as a potential driver of significant upside.“Current production plans suggest the most favorable mix we’ve ever seen for an iPhone launch, and the introduction of a fourth iPhone model at a price between iPhone 12 and iPhone 12 Pro will also help to boost blended average selling prices (ASPs). While the stock has already had a strong run since our upgrade last summer, we don’t yet think all the benefits of what we expect to be a two-year 5G upgrade cycle are yet reflected in consensus estimates,” Caso commented.According to Caso, these checks confirm that the iPhone 12 lineup will feature four new models: an entry-level iPhone 12, iPhone 12 Max, Pro and Max Pro.The sources couldn’t provide any insights on pricing, but the analyst expects the base model to start at $699, which is the same price as last year’s iPhone 11, only with a smaller screen. He also believes the Pro and Max Pro will remain “premium tier” phones, priced at $999 and $1,099, respectively. For the iPhone Max, AAPL will most likely price it at a modest premium to the base model, in the range of $799, in Caso’s opinion.All in all, the checks indicate build plans to support production of roughly 75 million units for the launch, including 64 million new models.Offering further explanation, Caso stated, “While we believe this is consistent with industry expectations, the mix assumptions driven by the initial build plans suggest a meaningful rise in blended ASPs. There’s no guarantee that current build plans will; reflect what consumers will actually buy, but the build plans provide insight into Apple’s expectations.”On top of this, Caso thinks that Apple will build more aggressively on higher priced stock keeping units (SKUs) to make sure they are available for holiday purchases, with lower priced SKUs expected to sell out before Christmas.As for mmWave, Caso argues “the mix is likely to be heavily weighted to U.S. sales, based on the assumption that Verizon will have mmWave on all models, and Verizon unit sales represent about 40% of the U.S. market.” He does, however, point out that he has confirmed mmWave will be supported on the Pro models, but “Verizon offering mmWave on the entry-level iPhone 12” is his “own assumption.”Everything that AAPL has going for it convinced Caso to keep his Outperform (i.e. Buy) rating as is. Along with the call, he lifted the price target from $110 to $120, suggesting 7% upside potential. (To watch Caso’s track record, click here)What does the rest of the Street have to say? 24 Buy ratings, 8 Holds and 3 Sells have been issued in the last three months. As a result, the consensus rating on AAPL is a Moderate Buy. In addition, the $122.04 average price target puts the upside potential at ~13%. (See Apple stock analysis on TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.,

Apple: Favorable Mix Expected Ahead of iPhone 12 Launch, Says 5-Star AnalystWith the iPhone 12 launch around the corner, all eyes are on Apple (AAPL). The launch is set to come in the next quarter, and investors are eagerly waiting to see what the tech giant has up its sleeve.5-star analyst Chris Caso, of Raymond James, tells clients that based on production checks conducted across the iPhone supply chain last week, total production estimates are in-line with the Street’s calls. That being said, he points to mix as a potential driver of significant upside.“Current production plans suggest the most favorable mix we’ve ever seen for an iPhone launch, and the introduction of a fourth iPhone model at a price between iPhone 12 and iPhone 12 Pro will also help to boost blended average selling prices (ASPs). While the stock has already had a strong run since our upgrade last summer, we don’t yet think all the benefits of what we expect to be a two-year 5G upgrade cycle are yet reflected in consensus estimates,” Caso commented.According to Caso, these checks confirm that the iPhone 12 lineup will feature four new models: an entry-level iPhone 12, iPhone 12 Max, Pro and Max Pro.The sources couldn’t provide any insights on pricing, but the analyst expects the base model to start at $699, which is the same price as last year’s iPhone 11, only with a smaller screen. He also believes the Pro and Max Pro will remain “premium tier” phones, priced at $999 and $1,099, respectively. For the iPhone Max, AAPL will most likely price it at a modest premium to the base model, in the range of $799, in Caso’s opinion.All in all, the checks indicate build plans to support production of roughly 75 million units for the launch, including 64 million new models.Offering further explanation, Caso stated, “While we believe this is consistent with industry expectations, the mix assumptions driven by the initial build plans suggest a meaningful rise in blended ASPs. There’s no guarantee that current build plans will; reflect what consumers will actually buy, but the build plans provide insight into Apple’s expectations.”On top of this, Caso thinks that Apple will build more aggressively on higher priced stock keeping units (SKUs) to make sure they are available for holiday purchases, with lower priced SKUs expected to sell out before Christmas.As for mmWave, Caso argues “the mix is likely to be heavily weighted to U.S. sales, based on the assumption that Verizon will have mmWave on all models, and Verizon unit sales represent about 40% of the U.S. market.” He does, however, point out that he has confirmed mmWave will be supported on the Pro models, but “Verizon offering mmWave on the entry-level iPhone 12” is his “own assumption.”Everything that AAPL has going for it convinced Caso to keep his Outperform (i.e. Buy) rating as is. Along with the call, he lifted the price target from $110 to $120, suggesting 7% upside potential. (To watch Caso’s track record, click here)What does the rest of the Street have to say? 24 Buy ratings, 8 Holds and 3 Sells have been issued in the last three months. As a result, the consensus rating on AAPL is a Moderate Buy. In addition, the $122.04 average price target puts the upside potential at ~13%. (See Apple stock analysis on TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.


,

Instant Quote

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

High West Capital Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

High West Capital Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with High West Capital Partners, LLC’s internal lending policies. High West Capital Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Singapore

168 Robinson Road
#12-01 Capital Tower
Singapore 068912

New York

Coming Soon!

Dubai

Coming Soon!

Market Coverage