Apple Inc. Stock Target Raised Again And Again For Iphone 7

Apple Inc. (Nasdaq:AAPL) stock has received another pair of price target increases based on the appearance of a better-than-expected iPhone 7 cycle. One firm states that a fresh survey points not only to strong demand but also upside to the average selling price, which backs up research conducted by another firm as well recently. The other firm believes Apple’s Inc. supply chain is preparing for production forecasts to be increased.

Today’s pair of positive reports stand in contrast to the last set which suggested that investors shouldn’t get too carried away just yet.

Apple stock target to $125

In a report dated September 22, RBC Capital Markets analyst Amit Daryanani bumped up his price target for Apple Inc. stock slightly from $120 to $125 per share and reiterated his Outperform rating. His firm surveyed more than 6,000 people and discovered that there’s a mix shift toward the plus-sized iPhone 7. As a result, he believes there could be significant upside to the average selling price.

He reports that 46% of those who participated in the survey intend to buy a 5.5-inch iPhone, either iPhone 6s Plus or iPhone 7 Plus. That’s an increase from the 38% who said last year that they intended to buy the larger size.

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Apple Stock AAPL

So overall, the analyst believes that average selling prices could surprise to the upside because of the greater preference for the iPhone 7 Plus and also the $20 increase in price this year compared to the iPhone 6s. Further, his survey indicated that the iPhone replacement is at least stable or at least lengthening at a slower rate than it was previously.

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Apple Stock AAPL

More memory = more upside to ASP

The RBC analyst ads that the mid-tier memory level is still the most popular as more than half of respondents plan to buy the mid-tier model, compared to 55% last year.

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Because Apple Inc. has bumped up the memory options and made the entry-level iPhone 7 have 32GB of memory instead of 16GB, he sees this as positive and better than he had “feared” previously. He added that the mix shift toward the bigger iPhone 7 should more than offset any dilution Apple Inc. might experience from the storage mix.

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Disclosure: This article is NOT an investment recommendation, more

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Chee Hin Teh 4 years ago Member's comment

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Chee Hin Teh 4 years ago Member's comment

Thanks for your sharing