Apple’s supply chain woes are well-documented at this point, and analyst reports on the subject continue to pour in. And no, that headline isn’t a typo. While most firms are just trimming their price targets for the iPhone maker but remaining Buy-rated (or the equivalent), one firm has moved off the sidelines. Interestingly however, the same firm also trimmed its price target for the stock.

Another analyst report illustrates that the Chinese are gobbling up iPhones like they’re going outta style.

Apple downgraded by Mizuho

In a report dated Jan. 10, Mizuho Securities analyst Abhey Lamba said they upgraded Apple from Neutral to Buy and cut their price target from $125 to $120 per share. The analyst said all the worries about the Cupertino, Calif.-based company’s supply chain translated into a good buying opportunity for investors.

He added that Wall Street may be “missing the forest for the trees” while acknowledging that data points from the supply chain are concerning investors. He said that the data points are only indicative of short term demand and that he believes investors are “extrapolating the data to eternity,” which he says is a mistake because he thinks Apple “continues to represent a very strong franchise that has potential to keep gaining share.”

Interestingly, he also mentioned “softness in China” a contradiction from the data highlighted by Stifel analysts (see below).

Core Apple worth $120-130 per share

The Mizuho analyst examines Apple’s full valuation to look past the current indications of weak iPhone demand. He estimates that an iPhone customer has a “lifetime value” of about $1,200 and believes that the company can keep growing its base.

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He surveyed more than 1,000 consumers and learned that the iOS ecosystem is still “alive and healthy,” which he expects to help Apple shares move back toward their fair value of between $120 and $130 “based on conservative customer spending ests.” He found that brand loyalty remains high and that a just over half of users are still on devices that predate the iPhone 6, which means upgrades could drive unit numbers over the next few years.

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Nearly half (45%) of users said they last upgraded their iPhone between one and two years ago, while 14% said they upgraded more than two years ago, indicating significant opportunities in upgrades alone.

Lamba believes the life of the iPhone will elongate in about 81% of cases after a survey used to gauge iPhone 7 demand. The survey indicated that the upgrade cycle for their last iPhone was 20 months, while for their current one, it was 27 months. In other words, if a large portion of iPhone users have had their current device for more than a year, the iPhone 7 cycle should be strong, although the analyst expects to see quarterly volatility.

Despite all the praise Apple’s upgrade program has received from other firms, Lamba believes the upgrade cycle will remain two to three years rather than rising to every year as Apple is hoping to do with the new program. He also says, however, that consumer behavior might shift because of the program with about 62% of survey respondents who plan to upgrade are interested in the program. Among those interested, more than half expect to upgrade within the next 12 months.

Apple’s FQ1 earnings may disappoint

Lamba warned that revenues and earnings for the December quarter might come up short of consensus estimates, although he does expect them to be within the provided guidance. Historically, Apple has delivered results near or above the higher end of the provided range, but Lamba is expecting results in or close to the midpoint of the range. The iPhone maker is scheduled to release its next report on Jan. 26.

He is projecting iPhone units of between 74 million and 75 million, revenue of between $75.5 billion and $76.5 billion, and earnings of between $3.10 and $3.20 per share. The consensus estimates are 76 million, $77 billion and $3.25 per share respectively. The analyst predicts that guidance for the March quarter will be under the consensus, although most are already expecting this.

China opportunities growing for Apple

Also this week, Stifel analyst Aaron Rakers and his team released the latest numbers for non-Android smartphone shipments in Mainland China. They assume that most of the non-Android phones that were shipped are iPhones.

The Stifel team found that non-Android shipments for the region climbed 33% year over year in Mainland China for the December quarter, reaching a new record of 24.3 million.

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Android smartphones continue to account for the lion’s share of the shipments with 84.1% in December, although that percentage is up from the previous quarter’s 81.5% and last year’s fourth quarter percentage of 83.5%.

Using these data points, they estimate that non-Android smartphone shipments were about 8.1 million in December, a slight sequential decline from 8.7 million but an increase from last year’s 6.3 million. For the fourth quarter, they estimate non-Android smartphone shipments at a record 24.3 million, compared to last year’s 18.3 million and 14.2 million in the previous quarter.

Apple shares edged upward by as much as 1.34% to $98.26 per share

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