Apple Inc. (NASDAQ:AAPL) looks to be going strong in the current quarter, and as a result, analysts at Jefferies have joined others in raising their long-term estimates and price target for the company. Analyst Peter Misek increased his target from $600 a share to $650 a share based on his latest quarterly survey.
Apple's trends look solid
Misek called Apple's trends for the December quarter "solid" with "stable trends" compared to the September quarter. They surveyed Apple Inc. (NASDAQ:AAPL)'s supplier, focusing on suppliers in Taiwan with a more than 40% revenue exposure to Apple. They saw their results increase 12% month over month and 8% year over year last month. That's compared to 9% in October.
The analyst reported that suppliers which have a greater exposure to Apple's iPhone 5S (like Foxconn Technology Co., Ltd (TPE:2354) (OTCMKTS:FXFCOF)) did even better than those which focus more on the lower-cost iPhone 5C (like Pegatron Corporation (TPE:4938) (OTCMKTS:PGTRF)).
Apple's current estimates remain the same
Misek reported that for the December quarter, he continues to expect Apple Inc. (NASDAQ:AAPLO to sell 55 million iPhones and 25 million iPads. That's roughly in line with Wall Street consensus. For the March quarter, his checks suggest that Apple has raised its build plans from between 40 million and 45 million to between 45 million and 48 million. He said that increase is because of the deal with China Mobile Ltd. (NYSE:CHL) (HKG:941).
For the March quarter, he is now estimating that Apple will sell between 42 million iPhones (up from 41 million) and see revenue of $45.6 billion (from $45 billion) with earnings per share of $11.22 (from $10.94).
When will Apple launch new products?
Another big question many people have been asking is when the iPhone 6 will come out. He reports that his checks suggest that Apple Inc. (NASDAQ:AAPL) is aiming for a July or August launch rather than a September launch. He agrees with most others who think the company needs a phone that's larger than four inches. However, he isn't sure Apple will be able to actually deliver it earlier in 2014 than it did the iPhone 5S and 5C this year.
He also mentioned the rumored iWatch, which he says is "on track" to launch in the first half of the 2014 calendar year. He also believes the rumored 13-inch iPad and / or "hybrid tablet notebook" will arrive sometime around June.
For the overall year, the analyst is also raising his estimates even more about Wall Street's consensus. His estimated revenue goes from $208 billion to $209 billion, while his estimated earnings per share goes from $52.24 a share to $52.85 per share. That's compared to Wall Street consensus of $195 billion in revenue and $47.47 per share in earnings.