Apple Inc. (AAPL) has been upgraded yet again on the heels of the iPhone 7 and Apple Watch Series 2. Since Sept. 12, AAPL has gained about 11% — its best gain in years — and that matches the amount of upside Apple has left.
The latest brokerage firm bullish on Apple shares is UBS. The firm boosted Apple stock’s price target to $127 from $115. UBS’ target is slightly above the median price target of $126, which represents an 11% gain from Tuesday’s close.
UBS cited as the reason for the upgrade. Analyst Steve Milunovich, however, doesn’t see as much demand for the iPhone 7 as for the previous generation iPhone 6. That said, Milunovich does see more demand for the iPhone 7 than the iPhone 6S, last year’s model.
Yesterday, JPMorgan analysts claimed , and that the excitement over AAPL stock was premature. What’s more, JPMorgan analyst Rod Hall believes the surge in demand for the new iPhone is “due to more aggressive-than-expected promos,” as all four major wireless carriers are advertising free upgrades and trade-in deals.
UBS’ Milunovich claims Verizon Communications Inc. (NYSE:VZ)
isn’t seeing a “significant change” in demand for the iPhone 7, while other mobile operators and retailers are seeing large pre-order volumes on the back of the Samsung Electronics (OTCMKTS:SSNLF) Note 7 fiasco. China, however, remains a mystery.
From the note:
“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’ per-share estimate increased from $9 previously. The firm also notes that Apple’s share price will likely take a dive before gaining into earnings.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
