Research firm’s Apple Inc. (NASDAQ:AAPL) Barometer consists of leading Taiwan-based suppliers that generate a high percentage of sales from Apple.
Preliminary November Apple Barometer
Preliminary November sales for the companies in Cantor Fitzgerald‘s Apple Inc. (NASDAQ:AAPL) Barometer have been reported, and analyst at the research firm can provide a view on trends during the month. With approximately 97% of the sales now accounted for in firm’s Apple Inc. (NASDAQ:AAPL) Barometer, analyst estimate sales in November rose by approximately 19-20% M/M and well above the November average of up 6% over the past eight years.
As such, analyst believe this November will prove to be the strongest in the history of firm’s Apple Barometer. In analyst view, the combination of strong demand for Apple Inc. (NASDAQ:AAPL) devices this holiday season, combined with the possible ramp ahead of a potential deal with China Mobile (reported in the Wall Street Journal on 12/5), could be responsible for this strong preliminary print.
Given the combination of a record October performance and analyst expectation of record growth in November, Cantor Fitzgerald’s Apple Inc. (NASDAQ:AAPL) Barometer is on track to report stronger-than average seasonality in 4Q:13. If firm assume an average MoM sales decline of 10% in December, analyst estimate firm’s Apple Inc. (NASDAQ:AAPL) Barometer will grow sales by 28% QoQ in 4Q:13, or more than double the average increase of 13% over the past eight years.
Carl Icahn’s push for Apple’s stock repurchase program
In analyst view, there are three near-term forces at work for Apple Inc. (NASDAQ:AAPL): strong demand for Apple products this holiday season, Carl Icahn’s push for a larger stock repurchase program, and a potential agreement with China Mobile.
Outside of these forces, analyst anticipate the introduction of a “mega-sized” iPhone in 2014 and analyst expect to see the company’s initial entry into the wearable device category with the “iWatch” next year. Although the exact timing of a full-blown Apple TV continues to be a wildcard, firm still believe the company will eventually enter this market.
Cantor Fitzgerald’s $777 price target is based on nearly 14x firm’s CY:14 pro forma EPS estimate (adjusted for interest income/expense), plus Apple Inc. (NASDAQ:AAPL)’s net cash per share of $142.77