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Alex Cho

Apple IPhone Units May Have Upside Next Quarter According to UBS Analyst Steven Milunovich

UBS analyst Steven Milunovich reiterates his positive stance, and moves his price target from $154 to $155. He mentions that purchase commitments from Apple suppliers is higher, which suggests that iPhone units could be much stronger than what consensus/Apple’s outlook suggests.

Here’s the direct quote from Milunovich:

Purchase commitments were up 16% YoY, the largest increase since Sep 2015 following four quarters of declines. This is somewhat surprising given hardware revenue is expected to be flat-to-down in March. Purchase commitments have been a reliable predictor of revenue in the coming quarter at an R2 of 92%. The $24bn in purchase commitments would predict revenue of $54.4bn, well above the $52.4bn at the midpoint of the guidance.

He goes onto mention that the stock is a buy and reaffirms his $138 price target. His EPS estimate is still conservative, and below consensus at $1.99 versus cons. estimates of $2.08. Furthermore, he estimates revenues of $52.19 billion, which is in-line with the mid-end of AAPL’s outlook for the next quarter.

Overall, the consensus seems to be moving estimates in-line with or below high-end of outlook, while reaffirming positive data points that may move estimates on shipments/earnings even higher.

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