Apple is expected to report that it shipped between 52 million and 53 million iPhones during the June quarter, according to Brean Capital analyst Ananda Baruah. The analyst maintains that the Wall Street forecast for Apple is “materially low” through 2017.
Brean Capital bullish on iPhone sales
The Cupertino, Calif.-based company is set to post its earnings after the market close on July 21. Based on consensus estimates, the company will ship somewhere between 48 million and 50 million iPhones in the June quarter, while management guided for around 49 million units. Further, Baruah believes sales for the higher priced iPhone 6 Plus will outperform market estimates. And the analyst states that this will help in boosting average selling prices and gross margins even more than anticipated.
Brean Capital is estimating earnings per share in the range of $1.90 to $2, compared to the Wall Street average of $1.77. Revenue is expected to come in between $52.5 billion and $53 billion, and gross margin is estimated to be between 40% and 40.3%.
The firm maintained its price target of $170 on Apple with a Buy rating. Brean initiated coverage on the stock in April with a price target of $160. The firm increased its target the same month as Apple’s record March quarter numbers were reported.
Apple iPhone sales “peaked”
In contrast, Deutsche Bank believes sales of the iPhone have “peaked” and that the future growth of the company will depend on other products, for which there is no clarity as of now. Sherri Scribner, author of the report for the German investment bank, believes the Apple Watch is a “wildcard.” However, Scribner expects the iPhone to have “another good quarter” with Apple selling 50 million units in the three months ending in June. However, she also believes “the overall smartphone market is slowing,” suggesting “slower growth rates for Apple.”
Reports of depleting iPhone sales have been going around for some time, but each time Apple has come back strongly. Investors are estimating that there is limited downside to the stock as the firm is cash rich. However, if sales do not achieve targets, there could be a pullback.
On Tuesday, Apple shares closed down 0.25% at $125.69, and year to date, the stock is up by almost 12%.