Apple Inc. (NASDAQ:AAPL)’s September sales data was mostly in last week, and analysts at Cantor Fitzgerald say the numbers indicated healthy growth during the month. When they ran their analysis of the company’s sales numbers, they had more than 95 percent of the company’s sales in.
Apple Barometer shows a healthy September
Analyst Brian J. White used data from their Apple Barometer, which measures Taiwan’s top suppliers which generate a high percentage of sales from Apple. According to those numbers, he estimates that Apple Inc. (NASDAQ:AAPL)’s preliminary September sales show they increased by about 9 to 10 percent month over month. That’s nearly in line with the average 11 percent increase over the last eight years but much higher than last year’s month over month increase of 3 percent. It also appears to match up with a survey done by Raymond James analysts, who estimated that the company gained about 10 percent in U.S. smartphone market share.
What does value investing really mean? Q1 2021 hedge fund letters, conferences and more Some investors might argue value investing means buying stocks trading at a discount to net asset value or book value. This is the sort of value investing Benjamin Graham pioneered in the early 1920s and 1930s. Other investors might argue value Read More
He notes that historically, the company traditionally launched the iPhone in June or July, although the date was pushed back starting in 2011. As a result, September sales numbers are somewhat skewed.
Apple saw weaker than average seasonality in Q3
White estimates that during the September quarter, Apple Inc. (NASDAQ:AAPL)’s preliminary sales fell 3 to 4 percent sequentially according to their Apple Barometer. That’s well below the average 21 percent increase over the last eight years. He notes that the company’s own third calendar quarter guidance was a decline of 4 to 5 percent. That outlook was far below the typical 18 percent increase in seasonality quarter over quarter.
Apple announced on Sept. 23 that its fourth fiscal quarter sales would be toward the high end of its original expectations He notes that last year the company’s sales for the quarter rose just 3 percent quarter over quarter as the iPhone 5 ramped up.
iPad 5 next on Apple’s list
According to White, Apple Inc. (NASDAQ:AAPL)’s large installed base likely “has an appetite for the iPad 5.” The company is expected to unveil a refresh of the tablet this month, and he said his research suggests that the refresh could offer a significant upgrade cycle. He believes since the company didn’t change the look and feel of its last few iPad versions, the company’s installed user base may be ready to purchase a new 10-inch iPad. The company has shipped approximately 155 million iPads through the third fiscal quarter of this year.
Apple still Buy-rated
The analyst reiterated his Buy rating and $777 per share price target on Apple Inc. (NASDAQ:AAPL). He based his price target on almost 14 times his 2014 calendar year pro forma earnings per share estimate, plus the company’s net cash per share of $140.29.