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Thursday, November 20, 2014

MUNSTER: Apple's iPhone 6 Sales Are Going Be Stronger For Even Longer Than People Are Expecting

iPhone 6 lines
REUTERS/Yuya Shino
Piper Jaffray analyst Gene Munster has raised his price target on Apple to $135, up from $120. 
Apple is trading at $114.67, up 43% year-to-date.
Munster is the just latest analyst to up his price target. This week Walter Piecyk at BTIG raised his price targetMorgan Stanley's Katy Huberty raised her target, and the Apple analyst at Oppenheimer raised the price target. 
Munster is raising his target because he believes the two latest iPhone models will sell in large numbers for longer than people expect. 
He says Apple still can't meet demand for the iPhone 6 and 6 Plus. He estimates that 58% of iPhone 6/6 Plus models are in stock at US Apple stores. That's up from 6% a month ago, but it still means that Apple is missing 42% of the iPhone 6/6 Plus models in its stores.
Anecdotally, employees at Business Insider have tried to order the iPhone 6 Plus and experienced difficulty finding it in stock in the mid-range, 64GB tier. This could be limiting sales as people wait to get the exact model they want.  
Munster also says that online orders are stable but experiencing delays. An iPhone 6 will ship seven to 10 days after being ordered. An iPhone 6 Plus will ship three to four weeks after being ordered online. 
These supply problems will not hurt this quarter's numbers, Munster says. He doesn't think Apple would have forecast the revenue it did if it thought it couldn't make enough iPhones. Apple is expecting $63.5 billion to $66.5 billion this quarter. Because of the supply issues, Munster doesn't think Apple is going to demolish its numbers; rather it will either hit them or just barely beat them.
Still, Munster sees the supply problem as a positive. If someone wants an iPhone but it's not in stock immediately, that person is not going to buy an Android phone; that person will just wait until it's in stock. As a result, Munster believes the iPhone 6 and 6 Plus will continue to sell very well into the first three months of next year as people continue to buy the phone.



Read more: http://www.businessinsider.com/analyst-raises-price-target-2014-11#ixzz3JdLGy7go

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