Following Apple's announcement that it sold over 10 million iPhone 6 and iPhone 6 Plus smartphones over its launch weekend, Canaccord Genuity analyst Michael Walkley raised his target price for the company's stock from US$112 up to $115 citing demand for the new models.
iPhone 6 sales have Canaccord Genuity raising Apple's target stock price
Mr. Walkley sees strong demand for Apple's iPhone line to continue, and expects that the iPhone 6 and 6 Plus will have a negative impact on Android-based smartphone sales.
"Despite demand currently much stronger than Apple's ability to supply the iPhone 6 and 6 Plus, we are raising our iPhone estimates and lowering our Android estimates for Q4/2014," Mr. Walkley said. "In fact, we believe the larger screen iPhones could result in very strong Q4/2014 high-end smartphone market share gains for Apple as initial surveys indicate a greater mix of Android smartphone consumers switching to the iPhone 6 smartphones than during the iPhone 5 series launches, primarily due to Apple finally entering the larger screen smartphone market segment."
Apple kicked off iPhone 6 and 6 Plus sales on September 12 with pre-orders that sold through 4 million units in 24 hours. In-store sales started last Friday, September 19, and the company reported this morning more than 10 million units had been sold through Sunday.
Apple's new iPhones include larger screens than previous models at 4.7-inches for the iPhone 6 and 5.5-inches for the iPhone 6 Plus. Both models use a faster Apple-designed A8 processor with M8 motion co-processor, offer faster WiFi and LTE connections, include an improved camera, come with iOS 8 pre-installed, include an NFC chip for mobile payments, and more.
Some Apple Stores dealt with lines that started well in advance of Friday's rollout, and customers continued to line up throughout the weekend in hopes of getting the new models. Those lines included many people choosing Apple's smartphone over Android-based models from Samsung, according to a survey conducted by Mr. Walkley.
"Our surveys also indicated record initial demand for the new iPhone 6 products with Samsung the most impacted in terms of high-end smartphone market share gains by Apple," he said.
Mr. Walkley increased his revenue estimate to $217.2 billion for 2015 and $224.1 billion for 2016 with an EPS at $7.77 and $8.19, respectively. He is maintaining his "Buy" rating for Apple's stock.
Apple is currently trading at $100.84, down 0.12 (0.12%).
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