Susquehanna Raises AAPL to $650 on Strong iPhone 5S Sales

| Apple Stock Watch

Apple's iPhone 5S is selling so well that Susquehanna Financial Group analyst Christopher Caso is raising his 12 month target price for the company's stock from US$625 up to $650. Those iPhone 5S sales are coming at the expense of the 5C model with Mr. Caso's manufacturing contacts showing a big shift to production of the higher end devices.

Shifting iPhone 5C production to the 5S means more money for Apple and investorsShifting iPhone 5C production to the 5S means more money for Apple and investors

Mr. Caso told investors,

Following our most recent checks, we believe December iPhone builds are running in the 52-54 million range, essentially in-line with our October 8 checks but better than our read in early December. Our checks indicate the mix has indeed shifted disproportionately to iPhone 5S, with production of 5S running nearly 4 times that of 5C. Importantly, we note there wasn't a fall off in demand for iPhone 5S after the initial strength of the launch. This shift should have beneficial revenue and gross margin implications for AAPL in C4Q.

Mr. Caso expects Apple will report first quarter earnings at US$57.1  billion, up from his earlier projection of $56.6 billion. He is projecting Apple will sell some 36 million iPhone 5S units, 10 million iPhone 5C units, 7 million iPhone 4S units, and 24 million iPads.

Apple introduced the iPhone 5S earlier this fall as the top of the line iPhone model. It sports a 64-bit A7 processor, improved graphics performance, and better photo quality. The iPhone 5C is a new mid-range model with essentially the same features as the now discontinued iPhone 5, but with a plastic back available in several colors.

Looking to 2014, Mr. Caso thinks Apple will unveil the iPhone 6 in June or July. "we still expect an iPhone 6 launch in June/July based on current build plans, but we also think the success of iPhone 5S has removed some of the time pressure for iPhone 6," he said, according to Barrons.

Mr. Caso's new $650 target price for Apple's stock comes with a "Positive" rating. Apple is currently trading at $547.10, down 3.67 (0.67%).

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Comments

ibuck

This investor will be happy when AAPL trades above $600.

skipaq

Ditto, @ I buck.

MacFrogger

And if it goes higher than $600, ibuck just might have to change his name to megabuck‚Ķ  wink  (Sorry, but I couldn’t resist the opportunity!)

Happy Holly-Days Everyone!

aardman

We went from zero to 5 iPhones in the family in a space of two months.  That includes one from work which is abandoning BB.  All are 5s, 3 are 64gb.  So my random survey of sample size one indicates a boffo year for Apple.

aardman

I meant all are 5ses.

Constable Odo

Apple stock has totally crapped out.  Amazon is well over $400.  Google has already touched $1100, and Priceline is near $1200.  Tim Cook’s Apple is sputtering like a wet fuse because the man is unable to put any shareholder value into the stock even with huge amounts of money being flagrantly tossed around in the stock market.  Why a company that has a mountain of reserve cash and can’t manage to attract big investors has to be a huge question mark about how poorly the company’s finances are being managed.  You put Apple up against the fundamentals of those stocks I mentioned and Apple seems more than equal to any of them.  However, whatever should be Apple’s strength is totally lost in translation when it comes to share price value.  No one wants to blame Tim Cook but he’s the one that refuses to touch the cash reserve to turn it into real revenue.  Instead, Apple shareholders are stuck with some laggard stock that struggles to stay above $550.

The end to this year sees an Apple ready to repeat last year’s swan dive as analysts upgrade the stock and price targets and still the share price heads downward ever so steadily.  It looks like Apple shareholders are going to get another lump of coal under the Christmas tree this year.  Nice going, Cook.  See where sitting on $146 billion in cash is going to get anyone.  All that cash and Apple still can’t get half a leg up on Google.  Pathetic.

adamC

@Constable Odo

WS is betting against Apple and there is no way they want Apple to win.

Amazon and the rest are offering promises whereas Apple produce solid results but the up side down world of the WS preferred to be fooled and win rather than to be proven wrong and lose by Apple.

One more thing the consumers behave exactly the opposite of what the pundits of WS said they will/would do.

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