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Earnings and different knowledge from Apple’s provide chain means that demand for the iPhone 12 and iPhone 12 Pro is way stronger than expected, in accordance with Morgan Stanley.
In a observe to traders seen by AppleInsider, analyst Katy Huberty factors out that Apple’s U.S. suppliers reported stronger than expected income and earnings previously week, which is an indication of robust provide chain orders.
Seven Apple suppliers, together with Qualcomm, Texas Instruments, Qorvo, and Cirrus Logic, reported earnings that shocked to the upside and beat consensus estimates by a median of seven%. Those suppliers additionally issued steerage above consensus by about 13% on common, implying a 12% quarter-over-quarter income development after three years of flat seasonality development.
Huberty factors out that the delayed launch of the iPhone 12 mini and iPhone 12 Pro Max may clarify this higher seasonality, however provider commentary additionally signifies that demand is exceeding prior expectations.
This knowledge additionally strains up with iPhone construct will increase for the December quarter and present indications of demand for launched fashions. Huberty notes that lead occasions for the iPhone 12 Pro stay flat week-over-week at 25 days, the longest of any iPhone mannequin at this level within the cycle.
The analyst says that offer chain knowledge and longer lead occasions assist Morgan Stanley’s above consensus iPhone cargo forecast of 220 million models for the 2021 calendar yr.
All of this factors towards a finest case state of affairs for the iPhone 12 lineup, for the reason that mixture of extra fashions, 5G assist, and aggressive provider subsidies are “likely to accelerate iPhone revenue growth from the already strong C3Q levels.”
Huberty’s 12-month AAPL worth goal stays at $136, based mostly on a 5.9x enterprise value-to-sales a number of on Apple’s product enterprise and a 10.5x EV/Sales a number of on Apple’s Services enterprise. That ends in a 6.7x EV/Sales a number of for 2021, and a goal 33.3x price-to-earnings a number of for that yr.
Shares of AAPL have been buying and selling at $116.64 in intra-day buying and selling on Friday morning.
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