UBS Thinks Street Too Cautious on Apple (AAPL) into Year End

Steve Milunovich from UBS thinks there is upside to his 50 million unit Apple (NASDAQ: AAPL) iPhone number which is higher than the street consensus 47.5 million units. He is also predicting 5% growth for December vs street consensus of 3% growth. While this may seem like splitting hairs, the extra 2 percentage points amounts to an extra 66% of growth.

A partner survey of US buyers finds iPhone upgrades remained near 75% of demand. iPhone 6s/6s Plus were 24% of the mix, down from 45% for the 6 line a year ago. Plus models were 27% of the mix, down from 29% in the June period.

The weighted average no-contract US iPhone retail price increased 1% sequentially and 15% YoY. ASP gains can be attributed to the highest recorded demand for device storage. Average GB per device rose 9% sequentially with the mix of base model purchases dipping below 40% for the first time.

No change to his Buy rating or $150 price target which is based on a F15E P/E multiple of 16.5x, a 5% discount to the current market multiple, or 13.3x when excluding $24 in net cash.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $113.77 yesterday.

You May Also Be Interested In

• KGI Securities Downgrades Apple (AAPL) to Hold
• Southwest (LUV) PT Raised to $61 at UBS Ahead of Q2 Print
• Tapestry Inc. (TPR) PT Raised to $230 at UBS on Long-Term Growth Potential